Tax­man told to ditch memo call­ing for tax on em­ployee dis­counts

The Daily Courier - - CANADA -

OT­TAWA — The fed­eral gov­ern­ment has in­structed the Canada Rev­enue Agency to re­move a con­tro­ver­sial tax pol­icy in­ter­pre­ta­tion that would have seen em­ploy­ees taxed for dis­counts they get at work.

To calm a grow­ing con­tro­versy, Na­tional Rev­enue Min­is­ter Diane Le­bouthillier di­rected the CRA on Wed­nes­day to re­move from its web­site the new word­ing at the heart of the de­bate — at least un­til the change has been re­viewed.

Le­bouthillier’s de­ci­sion to re­store the old word­ing came af­ter strong ob­jec­tions from the busi­ness com­mu­nity.

They warned the un­ex­pected rein­ter­pre­ta­tion would lead to new taxes on re­tail work­ers, many of whom earn mod­est wages. In­dus­try groups also said it could cre­ate big ad­min­is­tra­tive bur­dens if em­ploy­ers were re­quired to track staff ben­e­fits.

The con­fu­sion cre­ated by the change ap­peared to sur­prise Le­bouthillier, whose of­fice blamed the CRA for the orig­i­nal de­ci­sion to up­date the word­ing with­out her ap­proval.

“This doc­u­ment was not ap­proved by the min­is­ter and we are deeply dis­ap­pointed that the agency posted some­thing that has been mis­in­ter­preted like this,” spokesman John Power wrote in an email Wed­nes­day.

He said the CRA will hold an in­ter­nal re­view on the word­ing change, which will be fol­lowed by a con­sul­ta­tion on the is­sue with in­dus­try groups. The for­mer word­ing in the agency’s em­ployer’s guide on the is­sue of em­ployee ben­e­fits was to be re­in­stated.

“The agency is­sued a guid­ance doc­u­ment that does not re­flect our gov­ern­ment’s in­ten­tions and the min­is­ter of na­tional rev­enue has in­structed of­fi­cials to clar­ify the word­ing,” Power said.

On Tues­day, Le­bouthillier in­sisted Ot­tawa was not tar­get­ing re­tail-sec­tor work­ers.

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