Tax on power bill rebates

National president of the Grey Power Federation Tom O’Connor is astonished that IRD has secret plans to tax monthly rebates paid by lines companies, through retail power companies, to consumers.

“We are aware that some power company rebates which are paid annually, are treated as dividends on shares and taxed accordingly. In our view, this is highly questionable but rebates paid, or discounted, from monthly power bills, are clearly not a dividend on shares.”

O’Connor said rebates, discounts, special prices and sales were all promotional inducements to encourage customer loyalty and were used by many retailers from motor fuel companies and power companies to super markets and hardware stores. He said many people on low incomes, particularly the elderly, can only balance their very tight household budgets by taking advantage of these inducements and it would be unconscionable for any government to tax them.

“As a demographic group the elderly are already faced with an inflation rate of about 19 percent. This latest move by IRD makes the Grinch who stole Christmas look like the Tooth Fairy. Some elderly people are having a hard enough time now making ends meet but this latest proposal is a tax grab too far.”

O’Connor said he had raised the federation’s concerns with Seniors Minister Maggie Barry and asked for her assistance in getting IRD to abandon the proposal.

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