No increase on incidentals allowance this tax year – and car allowances are down
- For the tax year that started on 1 March there will be no increase in the tax-free allowance for incidental expenses during travel, under a rate gazetted by Sars on Friday.
- Meanwhile, finance minister Tito Mboweni has decreased own-car travel allowances.
- The simplified per-kilometre rate is down 4%.
- For those with the most expensive cars, a deemed fixed cost used in calculations is down by 7%.
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South African taxpayers travelling for work are not getting an increase in their discretionary daily allowance this year – and those using their own cars will see lower maximum limits on what their employers can pay them before they are taxed.
SA Revenue Service (Sars) commissioner Edward Kieswetter and finance minister Tito Mboweni gazetted the numbers separately on Friday. They are of retroactive effect from 1 March this year.
Kieswetter decreed the maximum amount that may be claimed as payment "in respect of meals and incidental costs" – food or other expenses, on top of main meals – to be R139 a day.
That is exactly the same as for the previous tax year.
Those travelling for work using their own vehicles will not only see a real decrease in allowances, but also a nominal one – even though petrol is now more expensive than it was a year ago.
Mboweni set the simplified per-kilometre allowance or reimbursement rate at R3.82 per kilometre. That is down 4% from the R3.98 that had been in effect in the previous financial year.
Those who opt for that simplified rate may receive only parking and toll fees from their employer; any payment on top of those will attract tax.
For someone driving on average 100km per workday on the simplified tariff, the impact will come to around R3,800 less in maximum allowance.
For those who use cost-scale calculations to claim the cost of driving for work, the impact is more complex.
That system uses three numbers: maintenance costs, fuel costs, and a fixed cost. Each of the three numbers are set according to the value of the vehicle used.
Maintenance costs have increased by around 3% across the board, while fuel costs have been reduced by about 1.5% across the board.
The critical fixed cost component has been decreased on a sliding scale, so that the impact is biggest for those with the most expensive cars.
For cars worth R665,000 or more, the effect is a 7.6% reduction of the fixed cost. At the bottom end, for cars worth R95,000 or less, the reduction is 5.8%.
Here is the new scale of costs, as gazetted:
Unleaded 93 petrol is currently around 4% more expensive than it was this time last year. The price outlook for the year remains uncertain, as oil producers closely watch global economic conditions, and try to moderate or increase output accordingly.
(Compiled by Phillip de Wet)
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