The Retirement Benefits Authority (RBA) has proposed changes to section 5 (2) (a) of the Income Tax Act to exempt staff of regulatory authorities from paying tax on benefits arising from the exempt status of their employer.
Section 5 (2) (a) of the Income Tax Act states that any taxable benefit, including leave pay, sick pay, payment in lieu of leave, fees, commission, bonus, pension, gratuity, or subsistence, travelling entertainment, or other allowances received in respect of employment or services rendered, is subject to taxation.
However, RBA wants changes to be made to the act so that employees of regulatory authorities (government agencies) do not have to pay tax on certain benefits from their employers, such as leave pay, sick pay, bonuses, pensions, and travel allowances.
RBA proposes that the taxes on these benefits be paid by the employer, to enable employees to save more for their retirement.
