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Industry & Economy - Income Tax


Fringe Benefit Tax

I HAVE looked into the present system of taxing perquisites and I have found that many perquisites are disguised as fringe benefits, and escape tax.

Neither the employer nor the employee pays any tax on these benefits, which are certainly of considerable material value. At present, where the benefits are fully attributable to the employee they are taxed in the hands of the employee; that position will continue.

In addition, I now propose that where the benefits are usually enjoyed collectively by the employees and cannot be attributed to individual employees, they shall be taxed in the hands of the employer.

However, transport services for workers and staff and canteen services in an office or factory will be outside the tax net. The tax is not a new tax, although I am obliged to call it by a new name, namely, Fringe Benefits Tax. The rate will be 30 per cent on an appropriately defined base.

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