Tax treatment of motor vehicles is top FBT concernRevenue
The tax treatment of motor vehicles was the number one concern of people who expressed their views on what should be covered by the government’s review of fringe benefit tax, Associate Minister of Revenue Paul Swain said today.
“In October we invited comments from the public on which issues should be included in the review and how compliance costs associated with fringe benefit tax could be reduced,” said Mr Swain. “The object was to ensure the review covers issues that are of real concern to employers and businesses.”
“We are very pleased with the excellent response. We received 68 submissions from a wide cross-section of the community including tax practitioners, business groups, government entities and members of the public. Some of the submissions were based on client surveys, so the number of views represented is even higher.
“The vast majority of submissions considered the fringe benefit tax system to be complex and costly, and they included ideas on ways to reduce the cost of complying with the tax and simplifyingn both the process and the rules.”
“Although most commented on the tax treatment of motor vehicles, they dealt with more than one issue.
“For those commenting on motor vehicles, valuation for fringe benefit tax purposes was the key area of concern, with many people considering it unfair for the valuation formula to be based on the original price of a vehicle. Other main concerns were home-to-work use of vehicles and work-related vehicles.”
“Other issues of common concern were the tax treatment of car parks, low-interest loans, low-value business assets such as laptops and cell phones, social benefits such as subsidised health insurance, and the fringe benefit tax exemption for employees of charities.
“The government agrees there is scope for simplifying fringe benefit tax and reducing the associated compliance costs, and we will be talking to interested groups and developing proposals aimed at doing that. The next step will be the publication in August of a government discussion document setting out proposals for change. This will be another opportunity for interested parties to ensure their views are considered, and I hope they will take the opportunity.
“In the meantime, I want to thank all those who sent us their views on the review, many of whom went to considerable effort. All the issues they raised will be considered in developing policy proposals,” said Mr Swain.