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Fringe benefits tax: Time for a rethink paper

Published on 01 Jan 98 by Australian Tax Research Foundation

Is the present Australian tax treatment of fringe benefits appropriate? Should they be a separate fringe benefits tax system, focused on employers, alongside the PAYE/personal income tax system, rather than a single system taxing cash and other forms of income in the same way? Is the status quo too costly in terms of administration and compliance costs?.

The broad conclusion of this report is that there are strong grounds for moving away from the present FBTsystem, which was initially introduced as a transitional means of taxing fringe benefits, towards integration of the taxation of fringe benefits into the PAYE/personal income tax system. The present FBT system is complex, costly with which to comply, hated by employers, and frequently and unfair as between different employees.

Author profile:

Geoff Carmody is a Director of Access Economics and worked for 15 years in the Federal Treasury. He worked in most policy areas including budget, wages and foreign investment policy. He represented Australia at the IMF and later at the OECD. After leaving Treasury he was a cofounder of Access Economics. He has undertaken a variety of projects including taxation policy submissions to the federal government, national wage case advocacy, and research for the tourism industry. Recently he was Executive Officer for the National Commission of Audit.

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