Title page for ETD etd-11122008-180830

Document Type Master's Dissertation
Author Andoh, Charles
Email andoh@cybertrade.co.za
URN etd-11122008-180830
Document Title Business-financed employee Voyager-mile points earned from SAA - a taxable benefit?
Degree MCom
Department Taxation
Advisor Name Title
Prof M Cronje Supervisor
  • South African Airways
  • SAA Voyager-Miles
  • taxable benefit
  • employer
  • employee
Date 2008-09-05
Availability restricted

Employees of various organisations undertake business trips on behalf of their employers for their day-to-day normal duties. Some of these trips happen to be made by flying, for which the business pays for the flight ticket. Many employees who do this travelling are also members of SAA Voyager Miles, where the employees accumulate Voyager Miles for the tickets paid for by the employer, in their private capacity. Why does the benefit go to the employee and not the employer who paid for the flight ticket?

The major objective was to find out why South African Airways (SAA) award of bonus miles received by an employee are not be treated as a fringe benefit and or constitute part of gross income in terms of the South African Income Tax Act, 58 of 1962, as amended, if the flight ticket is financed by the employer.

Another objective was to find out what the corporate agreement instituted by SAA entails, where the benefit goes to the employer and not the individual employee.

Questionnaires were sent out to a number of employees working in a corporate environment, where some receive the benefit of Voyager Miles for business trips paid by their employer but they use the Voyager Miles for his/her private use. These questionnaires were pitched against the agreement to be signed before any individual becomes a Voyager member. These were collated and coded to bring out issues for discussion and possible conclusions.

Expected major findings for trading off the miles to friends and acquaintances were not realized; instead, miles were mainly utilised by the employee and his/her immediate family, in the case where the travelling was financed by the employer for business purposes. Only a few employers confessed to keeping the discount for the use of the employer. It came to light that the corporate agreement, by which the benefit was solely intended for the employer, was respected by a few employers who utilised the discount earned for the benefit of the business, although the majority of employers allowed their employees to enjoy the miles earned, although the ticket was paid for by the employer.

The miles earned and utilised by the employee if the ticket had been paid by the employer cannot, however, be taxable under current legislation as SAA is not associated institution of the employer.

Copyright 2008, University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria

Please cite as follows:

Andoh, C 2008, Business-financed employee Voyager-mile points earned from SAA - a taxable benefit?, MCom dissertation, University of Pretoria, Pretoria, viewed yymmdd < http://upetd.up.ac.za/thesis/available/etd-11122008-180830/ >


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