By Adam Hollingworth
An Auckland business organisation is labelling Government plans to tax those parking spaces allocated as a perk "mean-spirited".
The Newmarket Business Association says the Government is unfairly targeting businesses in the CBDs of Auckland and Wellington, where parking a car is most expensive.
Many workers take a parking space close to work as an untaxed perk of their employment package, but the Government wants to close that loophole.
If you have an allocated car park in Auckland or Wellington CBDs you're now going to get stung with something called the Fringe Benefit Tax.
The Newmarket Business Association says it's a mean-spirited move.
“The provision of parking is a tool of trade, it's not a perk,” says Newmarket Business Association CEO Ashley Church.
“By taxing this particular amenity that's available to workers it's going to make it extraordinarily difficult for workers and people that otherwise would have to pay for it themselves.”
Parking has become big business. An online auction site today had one parking space at a car park on Queen St priced at $70,000. The same price as three-bedroom homes on 1000 square metre blocks in Taumaranui, Tuatapere and Patea.
When the change was mooted six months ago the Government was eyeing up revenue from $700 million in untaxed benefits across the country. Those plans have since been scaled back to Auckland and Wellington CBDs, and shift workers won't be targeted, but one tax expert says it'll still be complicated.
“I think the proposal is fine in principal because they are trying to tax substitutes for salary but I think the rules that they're likely to come up with when we see the detail will be very complex for employers to administer and are not likely to raise a lot of revenue,” says PriceWaterhouseCoopers tax specialist Geof Nightingale.
The changes will come into effect next year, and from April 2014 the IRD will be collecting.
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