"The Government's reduction in the rate of Fringe Benefit Tax on low income earners isn't as generous as Michael Cullen would like you to believe," National's Revenue Spokesperson Annabel Young said today.

The Government pushed the FBT rate up from 49 percent to 69 percent late last year, and subsequently promised to ease off on that.

"They promised to replace the flat rate with a multi-tiered system, with FBT levied at a rate based on the person's income.

"That would have lowered the amount businesses had to pay in FBT.

"But in a sneaky move a Government dominated select committee has changed the formula - and will now base the FBT rate on the person's income PLUS the value of the fringe benefit.

"That artificially pushes more people into paying higher rates of FBT.

"This new system is far too complex for many employers to run by themselves, and will result in higher compliance costs as they seek advice from tax specialists.

"The previous Government did a number of things - such as scrapping annual tax returns for most employees, in a bid to cut down on red tape and compliance costs. Labour seem intent on doing the opposite.

"The latest changes, made in secret without real consultation, mean a lot more people will be affected, and yet more money will be taken straight from the pocket of businesses.

"If this latest snipe at business is part of the Government's 'Charm Offensive' then it's clear they're light on the Charm and heavy on the Offensive," Annabel Young said.

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