Correctional Services spokesman Manelisi Wolela has denied allegations that student leader Mcebo Dla.
It looks like we are approaching the end of the road for travel allowances.
This follows a recommendation by National Treasury that the deemed mileage and cost method of determining the deduction against the travel allowance granted to employees be scrapped from next year.
In its hey-day, remuneration structuring was widely used by employers to provide employees with a higher than normal after tax income.
This was mainly as a result of the South African Revenue Service (Sars) accepting the so-called "salary sacrifice" principle for remuneration structuring in order for employees to structure their affairs so as to pay the minimum amount of taxation as possible.
Mike Teuchert, tax partner at Grant Thornton in Cape Town, says, however, that slowly but surely Sars have been removing the ability for both employees and employers to structure their remuneration packages in a manner that would reduce their tax burden when compared to the receipt of an unstructured salary.
"In fact, Sars have on numerous occasions telegraphed the fact that they are going to limit the ability of employers to structure the remuneration of their employees," says Teuchert.
He says the last significant remaining remuneration structuring method available to employees has been the utilisation of the so-called travel allowance, which benefit is now to be severely curtailed.
"Treasury's rationale for removing the deemed mileage and cost method is somewhat dubious and does not seem to be based on any objective research.
"Reading between the lines, it seems that their main objection is that there is no full-proof mechanism for Sars to validate the actual mileage travelled by employees claiming against their travel allowances."
Currently, Teuchert says 40 percent of the allowance is not subject to monthly pay-as-you-earn (PAYE).
"With the curtailment of the travel allowance, one would assume that the PAYE concession would also be removed or reduced, thus impacting salary earners monthly after tax cash flows," he says.
But Teuchert says the announcement is not doom and gloom for all employees receiving travel allowances as those employees who are incurring genuine business travel will be able to claim a deduction, provided that they maintain a detailed logbook and keep accurate records of the costs incurred in the running and maintaining of their vehicle.
"Sars hold the view that the travel between an employee's private residence and their place of work does not constitute business travel, which will impact the mileage qualifying for business purposes.
"The abolishment of the deemed mileage and cost method of claiming against a travel allowance could have a negative impact on those employees receiving travel allowances, either in the form of additional record keeping or reduction in take home pay.
Teuchert says to claim a tax deduction one would be required to maintain a logbook to justify business travel.
He advises those employees who would want to use travel log books to download it from the Grant Thornton's website.