Bargaining councils offered reprieve over neglected benefit deductions
Certain bargaining councils have apparently neglected to deduct employees’ tax on benefits given to their members for decades.They have now been offered the opportunity to become tax compliant by paying a hefty levy on the total employees’ tax that should have been deducted from all payments to members over the past five years.However, it seems as if there is a fair amount of confusion in the industry about the way forward. There is also concern that relief offered to noncompliant bargaining councils is too narrow.What is clear is that once the councils are compliant, members can expect that the payments they receive will be smaller due to the tax deductions.National Treasury announced in the draft Taxation Laws Amendment Bill, published in July, that bargaining councils had not been deducting pay-as-you-earn (PAYE) tax from a large number of members for holiday, sick leave and year-end payments."Many bargaining councils have also not been paying income tax in respect of the returns...
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