Call To Abandon FBT
Government's proposed review of Fringe Benefit Tax applying to motor vehicles this year should be foregone and the tax simply abandoned altogether, the Employers & Manufacturers Association (Northern) says.
"There is no longer any reason to keep FBT," said Alasdair Thompson, EMA's chief executive.
"Calculating the tax and collecting it represents a substantial compliance cost for business, especially for SME's.
"All employee benefits such as company vehicles, low interest loans, low rents on houses, and health insurance should be taxed as personal income and absorbed into PAYE tax. This would immediately simplify the tax system and reduce compliance costs.
"While the change would involve employers paying their staff more to cover the tax on fringe benefits, they would then no longer have to pay the direct cost of FBT nor involve themselves in the costs of compliance.
"Government's revenues would be unaffected.
"The tax rules applying to these various categories of rewards and remuneration currently treated as FBT are now well known and should no longer be treated separately.
"If this suggestion were adopted several recommendations from the Ministerial Panel on Business Compliance Costs would be addressed straight away."