Submission on Fringe Benefits Tax reform

Fringe Benefits Tax (FBT) has long been derided as an over-engineered, unnecessarily complex policy response to the undoubted need for a level playing field for the taxation of cash and non-cash benefits.

CA ANZ has written to the Treasurer outlining some initial thoughts regarding FBT reform.  Ideas include:

• re-drafting the FBT legislation using a principles-based approach
• adopting a self assessment approach to the otherwise deductible rule by allowing employers to declare that no salary sacrifice arrangements are entered into for employee expenses, and only those expenses which the employer considers to be 100% work related are paid or reimbursed, allowing for:
  • some minor, infrequent benefits to a specified dollar value (these are currently treated as exempt benefits – see below)
  • entertainment to which current FBT rules will continue to apply.
• Lifting the $300 minor, infrequent fringe benefit threshold
• Modernising the FBT Act to cater for the work from home revolution
• Systems such as single touch payroll.

In the longer term, CA ANZ sees merit in taxing private employer provided fringe benefits of value to the employee in the employee’s hands.