The SARS “Guide for Employers in respect of Fringe Benefits (2012)” provides that the following are fringe benefits (amongst others) and hence subject to tax:
· “The provision of security for the protection of the private home of an employee in the form of the installing of an alarm system, burglar bars or the provision of armed response.” (page 8);
· A taxable benefit shall be deemed to have been granted where an employee is granted the right of use of any motor vehicle for private or domestic purposes (page 10), the tax is calculated on 3.5% of the cost of the vehicle to the employer per month! The private use of the vehicle includes travelling between the employee's place of employment and place of residence.
· A taxable benefit shall be deemed to have been granted where the employer has provided the employee with residential accommodation either free of charge or for a rental consideration which is less than the value of such accommodation.
Please note that the Holders of an Office, such as the President, Vice President, Ministers, Provincial Premiers etc, are included in the definition of an employee for the purposes of calculating Employees Tax and Fringe Benefits per the Income Tax Act.
We are now told that the infamous Ministerial Handbook allows for the state to improve security at the private residence of a Minister by R 100 000. Presumably this is then a Fringe Benefit and should be taxed. Similarly spending R 238 000 million on the private residence of a politician should result in tax of R 95.2 million. Just how said politician is going to pay this on a salary of R 2.6 million per year I am not sure.
The Ministerial handbook also allows Ministers to purchase vehicles to 70% the value of their salaries. On R 2.6 million this means R 1.82 million. The tax on this would be R 305 000 per year (R 2.6 million * 3.5% * 12 * 40%). Of course each wife is also entitled to a car and we know that this is also a Fringe benefit as the providing of a benefit to a relative is also taxed. With 4 wives this implies a tax burden of at least R 1.2 million giving a total tax on the use of cars as R 1.5 million per year. This is also difficult to pay on a salary of R 2.6 million.
Then of course there is housing. This is also taxed, as are holidays, medical benefits, airplane tickets, food, free services etc.
This scenario does not just apply to the President but every holder of an office in the country regardless of which political party they come from. As an employee you and I are taxed on everything our employer does for us or pays us. Why should politicians be allowed to party at our expenses? If these items are not taxed, either because the law does not allow for it or SARS does not collect it, then why should you and I be taxed on these items if we can get our employer to give them to us?
So the question to SARS must be: are you collecting the tax on these benefits? If not, why not? How can you ask me to pay my taxes honestly when you are allowing the rich and powerful to get away with paying next to nothing? Tax it seems to me is a way that politicians and the rich milk the middle classes and the poor (think of VAT). All that SARS does is act as the debt collectors and enforcers of the already rich and powerful. You and I Jack, are screwed.