Goodie bags: technically they’re taxable

When I started off on the lecture circuit, the venues were confined to school or town halls, and tea and a sticky bun were provided by a local charity.

A public lecture was very much a community engagement exercise and the only reward for attendance was the knowledge and inspiration gained.

Not so today. The bill for a bum on a seat for a morning in a modern conference facility can easily exceed R600 a delegate (excluding lunch but including designer bottled water).

In an effort to attract high-paying corporate delegates, promoters now include a “goodie bag” in the conference marketing material. This could be justified when it was a conference survival kit of a pen, paper and newspaper, or perhaps a chocolate biscuit, Prozac and Imodium.

But today business and academic conferences are often sold on the value of the goodie bags. They throw in computer bags, embroidered golf shirts, caps and complimentary gift vouchers worth hundreds of rand. There are even offers that include tablet devices worth more than half the exorbitant conference fee.

Technically, the delegate who gets gift vouchers and tablet devices for attending a conference paid for by the employer has received a taxable fringe benefit. The employer could even be at risk for not deducting PAYE. But the South African Revenue Service (SARS) would have a long row to hoe in tracking all that down.

In the medium-term budget policy statement, Finance Minister Pravin Gordhan announced a welcome range of curbs on wasteful government expenditure.

Perhaps the list should be a guideline for all institutions because it addresses, inter alia, luxury cars, business-class travel, hotels and entertainment. Unfortunately, it missed goodie bags and overpriced conferences in exotic locations.

SARS has a zero-tolerance policy for gifts. And that is quite right. Other organisations, including Parliament, have a gifts register in which employees are required to declare anything received that has a value of more than, say, R100. These are harsh measures. But, given the temptations on offer, perhaps they are very appropriate.

Originally published in the Sunday Times: Money & Careers Tax Talk column.


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