Other consequential changes

Clauses 35, 548 and 616

Submission

(Matter raised by officials)

Several references in other sections of the Income Tax Act that currently refer to the main provision that determines whether allowances are taxable or non-taxable also need to refer to the new provisions relating to relocation payments and overtime meal allowances. The relevant sections in the 2007 Act are:

• section DD 10(a) relating to reimbursement and apportionment of entertainment expenditure;
• section EA 3(7) relating to prepayments; and
• definition of “employee” in section YA 1.

Comparable changes are also needed in the 2004 and 1994 Income Tax Acts.

Comment

These amendments are merely consequential changes as a result of carving out the relocation payments and overtime meal allowances from the more general provision that determines whether allowances are taxable or non-taxable. The amendments ensure that the rules covered by the amendments (as referred to above) continue to apply also to the two carved out allowances.

Recommendation

That the submission be accepted.