Noel Ahern
Question:140 Mr. N. Ahern asked the Minister for Finance the present position regarding the introduction of the fringe benefit tax as announced in the 1992 budget speech; and if he will make a statement on the matter.
Written Answers. - Fringe Benefits Tax.
The Government announced in November last their decision not to proceed with the introduction of the new fringe benefits tax, to be levied on all employers, which was envisaged in the 1992 budget. In arriving at this decision, the Government was influenced in particular by the undesirability of any action that might impact adversely on employment costs. It also took into account that the advantages of this approach in other countries derived mainly from bringing about effective taxation of certain benefits, such as company cars and preferential loans, for which current taxation arrangements here are basically satisfactory.
The Government's objective is to broaden the tax base so as to make possible improvements in income tax which benefit all taxpayers. While effective taxation of fringe benefits is essential to prevent erosion of the tax base by the proliferation of this form of remuneration and to ensure the basic equity of the tax system, the Government concluded that the best approach was to reinforce the existing arrangements for taxing fringe benefits via income tax.
The Government therefore asked the Revenue Commissioners to take the necessary steps, through wider recourse to their existing statutory powers and the application of staff resources becoming freed from other areas, to achieve more effective taxation of fringe benefits but within the basic parameters of the existing system.