We spend quite a lot of time on this blog criticising the transport policies of Central Government, so it’s really great to finally have something to praise. Yesterday’s announcement that fringe benefit taxes will generally be applied to all parking perks is a great step in the right direction of levelling the playing field between transport modes:
The Government is targeting employer-provided carparks as it moves to tighten the tax rules on perks used as trade-offs for salary.
Revenue Minister Peter Dunne announced today that Cabinet had made its final decisions on the suggestions outlined in an April 2012 issues paper Recognising salary trade-offs as income.
“We have listened to public submissions and the proposed new rules are now narrower than originally suggested, focusing predominantly on employer-provided carparks,” Dunne said.
The specific changes would tax more carparks provided to employees through the FBT (Fringe Benefit Tax) rules, mainly in the Auckland and Wellington central business districts where the benefits to the employee are greatest.
There will be exclusions for carparks used by work vehicles, for late night shifts and disabled carparks. A standard value will be put on a carpark when it is not provided through a commercial carpark operator.
The new rules will replace the current on-premises/off-premises distinction for determining whether a carpark is subject to FBT.
I’d love to see a situation where all employees are given the choice of on-site parking or a paid public transport pass or the extra cash in hand. Hopefully as employers will now have no tax advantages in providing their staff with parking spaces compared to providing them with a HOP card or just paying them a bit more, we might actually see this happen. Of course we also need to stop regulations forcing employers to provide each and every one of their staff with a parking space too.