Inland Revenue can’t speak about Yellow Cab Cash specifically but spokesperson Catherine Delore says: “If a taxi company provides a front-line staff member with
commission for sending customers to them, then that front-line staff member will need to treat the payment as income.”
But a 2001 IRD guidance note indicates a tax escape route.
If no money changes hands, and goods or services are given instead, the tax test is whether “income benefits received can be converted into money”.
If so, the incentive is taxable – “but a free meal received by a coach driver”, for example, “every time he or she brought in tourists would not be”.
The kickback issue has frequently reared its head in local tourism circles.
In 1993 the then New Zealand Tourist Industry Federation and Tourism Board conducted an inquiry into the issue.