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The Government drops plans to impose FBT on car parks

Bill English and Peter Dunne have today released a joint press statement announcing that the Government will not continue with a proposal which would have changed the way some employer-paid car parks in central Auckland and Wellington are treated for tax purposes.  The matter has received considerable press in the past week and was discussed at Cabinet this morning.  

“The proposal was made as a matter of fairness, because in general we consider that cash and non-cash benefits should be taxed the same way,” Mr English says. “While we do not resile from that general principle of fairness, we do need to be pragmatic. This was considered likely to be one of those proposals from IRD where the cost of compliance, compared with the likely return, made it not worth pursuing.”  The Minister goes on to state that the government will still focus on fairness in the tax system but that there are bigger and more important tax matters for officials to focus on.

It is important to note that this announcement does not cover the taxation of private phone and internet use which is a separate proposal originating in a November 2012 discussion document, “Reviewing the treatment of employee allowances and other expenditure payments”.  Submissions on this issues paper closed on 1 February 2013.  These submissions are currently being considered by Officials who will make recommendations to Government with inclusion in a tax bill later this year.  While submissions have closed on this issue, it is likely any noise around this now will likely impact on the form of the final proposals that make it into the tax bill. 

The full press release can be read here

 

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