Section 8(1) of the Income Tax Act, 1962, makes provision for the taxation of that portion of an allowance or advance paid to any person to defray travelling expenses for business purposes, which was not actually expended by the person on such travelling.
Where the person has kept accurate data of the portion of the allowance expended by him or her during the year of assessment for business purposes, the taxable portion of the allowance or advance is calculated based on the data furnished by him or her. However, if no accurate data was kept, the deductible expenditure against the allowance or advance is calculated by applying the rate per kilometre prescribed by the Minister of Finance by notice in the Gazette for the category of vehicle used, to the distance travelled during the year for business purposes.
The Minister may also fix a specific rate per kilometre which may be applied where a reimbursive allowance is paid to the recipient which is based on the actual distance travelled for business purposes.
These rates per kilometre were last fixed by the Minister in 1996. In view of the steady increase in the fuel price and the fact that more than 3 years have lapsed, the table setting out the rates has been adjusted with effect from years of assessment commencing on or after 1 March 2000:
| Where the value of the vehicle - | Fixed cost | Fuel cost | Maintenance cost |
| . | R | c | c |
| does not exceed R30 000 | 16 916 | 23.1 | 17.1 |
| exceeds R30 000 but does not exceed R35 000 | 18 984 | 23.5 | 17.3 |
| exceeds R35 000 but does not exceed R40 000 | 21 051 | 23.8 | 17.8 |
| exceeds R40 000 but does not exceed R45 000 | 23 116 | 24.4 | 18.5 |
| exceeds R45 000 but does not exceed R50 000 | 25 197 | 24.8 | 19.2 |
| exceeds R50 000 but does not exceed R55 000 | 27 670 | 25.3 | 19.9 |
| exceeds R55 000 but does not exceed R60 000 | 29 778 | 25.5 | 20.6 |
| exceeds R60 000 but does not exceed R70 000 | 33 873 | 25.9 | 21.3 |
| exceeds R70 000 but does not exceed R80 000 | 38 102 | 26.1 | 22.2 |
| exceeds R80 000 but does not exceed R90 000 | 40 538 | 26.3 | 22.7 |
| exceeds R90 000 but does not exceed R100 000 | 44 535 | 26.5 | 23.4 |
| exceeds R100 000 but does not exceed R110 000 | 48 533 | 26.8 | 24.1 |
| exceeds R110 000 but does not exceed R120 000 | 51 110 | 27.5 | 24.8 |
| exceeds R120 000 but does not exceed R130 000 | 54 990 | 28.1 | 25.5 |
| exceeds R130 000 but does not exceed R140 000 | 58 803 | 28.9 | 26.2 |
| exceeds R140 000 but does not exceed R150 000 | 62 677 | 29.4 | 26.9 |
Where the value of the vehicle exceeds R150 000 -
(a) the fixed cost shall be the sum of R62 677 plus an amount of R3 874 for every R10 000 or part thereof by which the value of the vehicle exceeds R150 000;
(b) the fuel cost shall be 29.4 cents per kilometre; and
(c) the maintenance cost shall be 26.9 cents per kilometre.
Where a reimbursive allowance is paid to the recipient and the distance travelled in the vehicle for business purposes during the year of assessment does not exceed 8 000 kilometres and provided 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, the rate per kilometre shall at the option of the recipient be determined at a rate of 153 cents per kilometre.
ISSUED BY THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE
PRETORIA