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Leave our gravy, MPs tell Manuel

20th February 2004

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Finance Minister Trevor Manuel good-naturedly accepted some tongue-in-cheek criticism from portfolio committee members yesterday for his plans to review the taxation of travel allowances.

Finance committee chairperson Barbara Hogan jokingly chastised Manuel for threatening to take away the "little bit of gravy" that MPs could look forward to.

"That's a little bit of gravy left on our little train. I think he's overstepped the mark," she said to laughter.

The committee had met to question Manuel on the Budget.

On Wednesday, the finance minister announced in his Budget speech he was concerned about tax losses resulting from motor vehicle travel allowances.

"In the coming year, we plan to review taxation of the motor vehicle allowance, and the ad valorem duty structure on motor vehicles," he said.

According to a Sars information booklet, the number of taxpayers using its expense schedule for motor vehicle allowances has increased substantially over the past few years.

This has resulted in "significant revenue losses" for the fiscus.

Sars says a large number of taxpayers "rely on the deemed expense schedule primarily as a result of the schedule's inherent overestimation of actual business cost".

"This overestimation in effect means that many taxpayers are able to deduct amounts that are effectively private expenses".

The schedule would be reviewed, "to explore the appropriateness of the deemed private and business kilometres travelled", it said. – Sapa.
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