Inner-city carpark tax plan about fairness, says Dunne

Mr Dunne says the tax is about "making sure that anything paid by way of salary or salary equivalent is treated fairly from a tax point of view". Photo / NZPA

Revenue Minister Peter Dunne says his proposed tax on employer-provided carparks is about fairness and he questions why opponents have only now challenged the plan.

The proposal to tax employers on inner-city carparks they provide to employees has drawn concentrated criticism from a well organised lobby group comprising an unlikely alliance of employer groups, advertising agencies, carparking companies and the Unite union.

The FBT (Fringe Benefit Tax) Action Group argues that the tax would take 110 minutes of an accountant's time to administer each employer- provided carpark each year. That, it says, adds up to a total compliance bill of $30 million a year across the almost 200,000 carparks in the Auckland and Wellington CBDs the tax would apply to.

That would far outweigh the $17 million a year benefit to the Inland Revenue, the group says.

But Mr Dunne says the tax is about "making sure that anything paid by way of salary or salary equivalent is treated fairly from a tax point of view".

"If someone is getting an employer- provided carpark as part of their salary package then there needs to be tax treatment of that carpark, otherwise it's an incentive to simply effectively increase someone's net salary package in a non-taxable way."

He said the policy was announced in last year's Budget.

"The question has to be asked, where were the employer groups and others who are so vocal now? Why did they not take their chance over the last year to raise these concerns as the policy was being developed?

However, he said: "We are looking through the issues that have been raised and will seek to address them as and when we can."

Officials were testing the FBT group's $30 million compliance cost figure. "Obviously if the costs outweigh the benefits we'll have to have a think about whether that's a wise situation to have."