National proposes overhaul of fringe benefit tax

A National-led government would overhaul fringe benefit tax and cut compliance costs, the party's finance spokesman John Key said today.

"I anticipate it will have an impact on crown revenue, reducing it by around $45 million annually, but National thinks it's worth every cent," he said in a speech to the Auckland Rotary Club.

"The next National government will cut the red tape and compliance costs that are choking our businesses and preventing them from getting off first base."

Mr Key said National would:
* allow employers to value vehicles by reference to either original cost or the tax written down value, while giving them the choice of valuing usage benefits from either actual use or vehicle availability;

* eliminate the need for complex record keeping and calculations caused by split-rate fringe benefit tax (FBT). A notional single marginal tax rate of 33 cents would be applied to all taxable benefits from which FBT could be calculated;

* raise thresholds that apply to the other benefits category, like laptops, mobile phones and business tools; and

* investigate the possibility of integrating FBT into the PAYE system.

Mr Key said he would not entertain suggestions of applying FBT to on-premises car parks.

"National will restore common sense and balance between government and the private sector," he said.

- NZPA