MINISTRY OF FINANCE
GOVERNMENT NOTICE

6 MAY 1996

FIXING OF RATE PER KILOMETRE IN RESPECT OF MOTOR VEHICLE FOR THE PURPOSES OF SECTION 8(1)(b)(ii) AND (iii) OF THE INCOME TAX ACT, 1962

Under subparagraphs (ii) and (iii) of paragraph (b) of subsection (1) of section 8 of the Income Tax Act, 1962 (Act No. 58 of 1962), I, Trevor Andrew Manuel, Minister of Finance, hereby determine that the rate per kilometre referred to in the said subparagraphs shall be an amount determined in accordance with the Schedule hereto.

1. In this Schedule, "value", in relation to a motor vehicle used by the recipient of an allowance as contemplated in subparagraphs (ii) and (iii) of paragraph (b) of subsection (1) of section 8 of the Income Tax Act, 1962, means -

   (a) where such motor vehicle (not being a motor vehicle in respect of which paragraph (b)(ii) of this definition applies) was acquired by such recipient under a bona fide agreement of sale or exchange concluded by parties dealing at arm's length, the original cost thereof to him, including any sales tax or value added tax but excluding any finance charge or interest payable by him in respect of his acquisition thereof; or
   
   (b) where such motor vehicle -
   
   

   (i) is held by such recipient under a financial lease as contemplated in paragraph 1 of Schedule 4 to the Sales Tax Act, 1978 (Act No. 103 of 1978) or a lease contemplated in paragraph (b) of the definition of "instalment credit agreement" in section 1 of the Value-Added Tax Act, 1991; or
   
   (ii) was held by him under such a financial lease and the ownership thereof was acquired by him on the termination of the lease,
   

   the cash value thereof as determined under paragraph 2 of the said Schedule 4, together with any sales tax paid by the lessor under such financial lease, or the cash value thereof as contemplated in the definition of "cash value" in section 1 of the Value -Added Tax Act; or

   
   

   (c) in any other case, the market value of such motor vehicle at the time when such recipient first obtained the vehicle or the right of use thereof, plus an amount equal to the sales tax or value added tax which would have been payable in respect of the purchase of the vehicle had it been purchased by the recipient at such time at a price equal to such market value.

   
   

2. The rate per kilometre referred to in the said sub-paragraphs (ii) and (iii) shall, subject to the provisions of paragraph 4, be determined in accordance with the scale set out in paragraph 3, and shall be the sum of -

   (a) the fixed cost divided by the total distance in kilometres (for both private and business purposes) shown to have been travelled in the vehicle during the year of assessment: Provided that where the vehicle has been used for business purposes during a period in such year which is less than the full period of such year, the fixed cost shall be an amount which bears to the fixed cost the same ratio as the period of use for business purposes bears to 365 days;
   
   (b) where the recipient of the allowance has borne the full cost of the fuel used in the vehicle, the fuel cost; and
   
   (c) where such recipient has borne the full cost of maintaining the vehicle (including the cost of repairs, servicing, lubrication and tyres), the maintenance cost.

   
   

3. SCALE

   Where the value of the vehicle -	Fixed cost	Fuel cost	Maintenance cost
   .	R	c	c
   does not exceed R16,000	10,118	18.8	17.0
   exceeds R16,000 but does not exceed R18,000	10,875	18.8	17.0
   exceeds R18,000 but does not exceed R20,000	11,632	18.9	17.0
   exceeds R20,000 but does not exceed R22,000	12,389	18.9	17.1
   exceeds R22,000 but does not exceed R24,000	13,147	19.0	17.1
   exceeds R24,000 but does not exceed R26,000	13,904	19.1	17.2
   exceeds R26,000 but does not exceed R28,000	14,661	19.2	17.3
   exceeds R28,000 but does not exceed R30,000	15,418	19.3	17.4
   exceeds R30,000 but does not exceed R35,000	16,744	19.5	17.6
   exceeds R35,000 but does not exceed R40,000	18,623	19.7	17.8
   exceeds R40,000 but does not exceed R45,000	20,429	20.0	18.0
   exceeds R45,000 but does not exceed R50,000	22,235	20.3	18.2
   exceeds R50,000 but does not exceed R55,000	24,042	20.7	18.6
   exceeds R55,000 but does not exceed R60,000	25,848	21.1	18.9
   exceeds R60,000 but does not exceed R70,000	28,557	21.5	19.4
   exceeds R70,000 but does not exceed R80,000	32,170	22.0	19.9
   exceeds R80,000 but does not exceed R90,000	35,782	22.6	20.4
   exceeds R90,000 but does not exceed R100,000	39,394	23.2	21.0
   exceeds R100,000 but does not exceed R110,000	43,007	23.8	21.6
   exceeds R110,000 but does not exceed R120,000	46,619	24.5	22.2
   exceeds R120,000 but does not exceed R130,000	50,232	25.3	22.8
   exceeds R130,000 but does not exceed R140,000	53,844	26.1	23.6
   exceeds R140,000 but does not exceed R150,000	57,456	27.5	24.4

   
   Where the value of the vehicle exceeds R150,000 -

   (a) the fixed cost shall be the sum of R57,456 plus an amount of R3,612 for every R10,000 or part thereof by which the value of the vehicle exceeds R150,000;
   
   (b) the fuel cost shall be 27.5 cents per kilometre; and
   
   (c) the maintenace cost shall be 24.4 cents per kilometre.

   
   

4. Where the provisions of the said subparagraph (iii) are applicable and the distance travelled in the vehicle for business purposes during the year of assessment does not exceed 8,000 kilometres, or where more than one vehicle has been used during the year of assessment the total distance travelled in such vehicles for business purposes does not exceed 8,000 kilometres, the said rate per kilometre shall at the option of the said recipient, and provided further that no other compensation in the form of an allowance or reimbursement is payable by the employer to the employee in respect of the vehicle, or vehicles, as the case may be, in question, be determined in accordance with a scale of 130 cents per kilometre.
   
   
   
5. The rate per kilometre determined under paragraphs 2 and 4 shall apply in respect of years of assessment commencing on or after 1 March 1996.