Strong and accelerating opposition has appeared to force the Government into reverse over controversial plans to tax employers on carparks provided for employees.
Despite a gathering storm of protest over the proposal, with opponents saying it would cost more to police than it would raise, Revenue Minister Peter Dunne as late as at the weekend had appeared prepared to drive on with the plan.
However, today, a joint statement from Dunne and Finance Minister Bill English says the Government will u-turn.
“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.”
Mr Dunne says officials’ estimates of the number of carparks which would have been affected were far fewer than the 180,000 that was being talked about publicly.
“Even so, for expected revenue of about $17 million, and the difficulties around ensuring the policy would not have adversely impacted other workers, it seems sensible not to proceed,” Mr Dunne says.
“We will continue to focus on fairness in the tax system but we also think that there are bigger and more important tax matters for officials to focus on.”
Ministers said that the issue was under consideration at select committee and had attracted considerable comment.
On balance, Cabinet has decided not to continue with it.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.