The government wants private sector workers to compensate for work benefits and has increased the income tax on company maintained cars. 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.
“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.
This is actually the latest revision – companies should have been topping up employee salaries for company cars from April 1, 2004.
During the last budget proposal the income tax threshold was lifted from Rs. 20,000 per month to Rs. 25,000 per month, but with a catch to the discount.
An employee with a company maintained car must have Rs. 7,500 added on to his or her salary slip before checking for income tax eligibility.