Abstract
M.Comm.
Fringe benefits in all its different understandings and debates is discussed
in this research, in accordance with the Income Tax Act, Act 58 of 1962
(hereafter called the Act).
The research is restricted to the provisions of the Act regarding fringe
benefits as applied by the Commissioner of Inland Revenue (hereafter
called the Commissioner). The other forms of direct taxes in the Act is not
dealt with and the only indirect tax that is discussed in this research is
Value Added Tax (hereafter called VAT).
To try and summarise the history of fringe benefits in a few paragraphs is
virtually impossible. The following comments and statements by certain
well-known tax consultants in a published tax magazine, are presented
below in an attempt to achieve this:
Fringe benefits phase-in
"... The taxation of fringe benefits is an emotional issue. And the
manner in which the new regime for the taxation of these benefits has
been introduced into our law has brought credit to no one. But the
painfully protracted process has been instructive. It has been a
Microcosm of the greater legislative process, and must have opened
the eyes of many taxpayers. When the Seventh Schedule was
introduced, there were four benefits to be phased in; the right of use
of an asset (other than residential accommodation or a motor vehicle),
the right of use of a motor vehicle, the occupation of residential
accommodation and the granting of an interest-free or low-interest
loan. When the Commissioner of Inland Revenue, having regard to
the circumstances, is satisfied that a taxable benefit has been granted
to an employee in substitution for remuneration that would normally
have been payable to the employee in cash or with the sole or main
object of providing the employee with the benefit of the phasing-in
relief, the phasing-in relief will be unavailable ...." (Stein, 1985:4).