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The government wants private sector workers to compensate for work benefits and has increased the income tax on company maintained cars. If you’re thinking of asking your boss for a car the next time you sit down to discuss a raise, think twice – the government is out to tax fringe benefits in the private sector including company paid cars.
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"The gazette on increasing the amount payable for company maintained cars was published on October 6, but companies must pay it from July," said R M Jothipala, Commissioner-PAYE, Department of Inland Revenue.
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This is actually the latest revision – companies should have been topping up employee salaries for company cars from April 1, 2004.
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During the last budget proposal the income tax threshold was lifted from Rs.
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20,000 per month to Rs. 25,000 per month, but with a catch to the discount.
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An employee with a company maintained car must have Rs.
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7,500 added on to his or her salary slip before checking for income tax eligibility.
In