Tax Instalment Deductions
9.43. Except in cases where an employer provides sustenance and use of quarters, the present law does not require that the calculation of tax instalment deductions take account of non-cash fringe benefits derived by an employee. The amounts attributed to sustenance and use of quarters for purposes of tax instalment deductions may, in any event, be less than their real value. The value of these benefits, and also cash allowances, are shown on the group certificate, but other non-cash benefits are not.
9.44. A fully effective system of taxing fringe benefits would require that all such benefits be included in the amount upon which tax instalment deductions are calculated and be shown in the group certificate in respect of an employee. Such a system is clearly out of the question. It would be unreasonable, for example, to expect the employer to calculate the cash value to each employee of discounts allowed to him.
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9.45. However, the Committee favours imposing much wider statutory obligations on employers to disclose fringe benefits in group certificates and to make tax instalment deductions from salary and wages in respect of fringe benefits given to employees. The obligation to disclose should extend to all fringe benefits of which the employee has knowledge. The requirement to make tax instalment deductions should at least apply to regular benefits such as the use of a motor vehicle, housing, board and lodging, low-interest loans and cash allowances. It would always be open to the employee to include in his return an amount different from the value assigned to the benefit by the employer and to substantiate this amount. The Commissioner of course would not be bound by either the employer's or the employee's valuation.