Tax changes to help employers provide green commuting options

Changes to the fringe benefit tax laws are set to make it easier for employers to provide their staff with e-bikes and scooters as company perks.

Until recently, having employees travel by car was more appealing for many businesses, due to the way fringe benefits for staff were taxed.

"So the FBT is something we apply to stop people from doing something, right? Now it works well in theory, but in practice it can have some unfortunate effects for transport," transport economist Stuart Donovan said.

These effects include the fact car parks provided by businesses were exempt from the tax, while greener transport options were not.

The Green Party's Julie Anne Genter was one of the leading advocates for the change.

She said it's "hugely satisfying" to see it happen.

"Up until now, the tax regime has unintentionally subsidised cars, particularly polluting cars, for commutes to work, and we've just been trying to level the playing field," she said.

Public transport incentives became exempt recently, with e-bikes, scooters and other low-emission forms of transport set to follow.

"In addition to the monetary benefit for people being exempt from fringe benefit tax, these exemptions support sustainable methods that reduce emissions and congestion on the roads," said Minister of Revenue David Parker.

"There are also health benefits for people travelling to work by more active methods, and although this is a small change in the grand scheme of things, these sorts of incentives provide valuable transport choices, and everything helps us achieve the changes we want."

However, Donovan cautioned he "wouldn't overstate the effect of this policy".

"I don't think there's going to be an enormous take up, at least initially, but it would be really beneficial for the people that make use of it."

The bill to introduce the changes is set for its third reading soon.