19 Mar 2013

PM downplays idea of taxing personal phone calls

3:21 pm on 19 March 2013

Prime Minister John Key has all but ruled out a proposal to tax personal calls made on work phones.

Inland Revenue is considering whether to tax personal use of smartphones, tablets and laptops that are funded by employers but Mr Key says there's virtually no chance such a change will be made.

On 18 March, the Government also dropped its plan to introduce a new tax on carparks that employees in central Auckland and Wellington get as part of their salaries.

Revenue Minister Peter Dunne says that would have raised about $17 million a year but the likely cost of compliance makes it not worth pursuing, and officials have more important tax matters on which to focus.

Mr Dunne says the carpark tax was proposed because the Government considers it only fair to treat non-cash benefits in the same way as cash benefits for the purpose of taxation.

He says the Government does not resile from the general principle of fairness, but it also has to be pragmatic: $17 million a year is a small amount and not worth the effort of claiming.

Last year Mr Dunne said the Cabinet had agreed to focus the tax on the Auckland and Wellington central business districts, where the benefits of a carpark are the greatest.

A lobby group has since claimed the tax would add $1500 a year to the cost of a carpark provided on an employer's own premises and $2400 for a commercial carpark space.