The purpose of this Circular is to advise you that an exemption has been sought on the provisions of Taxation Ruling No. 96-21 dealing with the taxation of meal and travelling allowances. 

The Taxation Ruling sets Australian Public Service allowances as the reasonable limits for taxation purposes. Where the NSW public sector allowances exceed those payable in the Australian Public Service the full allowance is to be included on the employee's group certificate. The employee would need to show expenses incurred for which the allowances was paid in their tax return. 

The exemption has been sought on the basis that the: 

1. management information systems in operation in the NSW public sector are not yet fully integrated and interfaced, but action is underway to address this issue. In the meantime, the Taxation Ruling raises administrative problems; and 

2. allowances are in some cases only marginally higher than those applying in the Australian Public Service. All the NSW public sector allowances have been appropriately fixed by our industrial arrangements. 

I will keep you informed of developments as the Taxation Ruling which will otherwise apply from 1 July 1997.

 Any enquiries may be directed to Wendy Barrett on telephone number (02) 9228 3568.

C. Gellatly
Director General