Feds ditch memo calling for controversial employee-discount tax, pending review
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.