Submissions
 

Submission No. 248 Back to full list of submissions
Download in either PDF or RTF format

 

19 April 1999

 

Mr J Turkington
05179
Resource Management

 

The Secretary
Review of Business Taxation
Department of the Treasury
Parkes Place
CANBERRA ACT 2600

 

Dear Sir

SUBMISSION - FRINGE BENEFIT TAXATION

Officers from the City of Joondalup have recently attended workshop sessions on the recently introduced amendments to the FBT reporting arrangements conducted by the Australian Taxation Office in Western Australia.

It is recognised that the Government’s proposals in relation to these reforms of FBT are focused on improving equity and ensures that high income earners cannot rearrange their remuneration packages to access tax rebates, avoid surcharges and be eligible for payments such as family allowance, etc.

Following these Australian Taxation Office presentations however, 2 aspects of the reporting requirements appear in need of further consideration and assessment:-

  • The Fringe Benefit Threshold

  • Fringe Benefit Taxation/Income Tax Years

FRINGE BENEFIT THRESHOLD

Legislation Requirement

Effective 1 April 1999 employers are required to report on employees’ group certificates a fringe benefit where that benefit exceeds $1,000 taxable value, ie the "grossed up" value.

Concerns

As a responsible employer, the City of Joondalup is currently in the process of compiling an information brochure advising staff of this requirement. Already some staff who attended the Australian Taxation Office seminar/workshop have queried whether the $1,000 threshold will be indexed to a suitable indice and increased progressively over the years. You are requested to consider this matter.

FBT/INCOME TAX YEARS

The FBT year operates from 1 April to 31 March, with the Income Tax year operating 1 July to 30 June.

Legislative Requirement

Fringe benefits granted to employees in the period 1 April 1999 to 31 March 2000 are to be reported in the employees’ group certificates for the 1999/00 year.

Concerns

The current misalignment of the respective tax years adds to the complexity of tax compliance and will make group certificate reporting additionally complex.

While some may consider that the inclusion of FBT information on group certificates will in itself delay the issuance of certificates, thus suggesting that the misalignment with the FBT year 3 months ahead of the normal tax year is of benefit, the City of Joondalup is of the initial view that it would be more beneficial to have the years coinciding.

It is proposed to closely monitor the work load and processes over the next year to gauge the validity of this initial assessment.

I trust this submission is of assistance when reviewing these new reforms.

Yours sincerely

 

J B TURKINGTON
Director Resource Management

JBT:LD

v:\admin\jbtletter\dpttreasfbt1904.doc