Federal Revenue Minister Diane Lebouthillier is blaming bureaucrats at the Canada Revenue Agency for hatching a plan to tax employee discounts, reversing a new interpretation of the tax code she says she never approved in the first place while instructing the agency to pull the plans from its website.
Lebouthillier's press secretary told the media the minister she is "deeply disappointed" employees at the tax collector issued a directive — or a "folio" — with new rules around how employee discounts on merchandise would be treated for tax purposes.
The CRA had said on its website that when an employee receives a discount on merchandise the value of the discount should be included in the employee's income at tax time.
Shortly after the statement was sent out, the folio was pulled from the CRA's website. One of her spokesmen said the minister has instructed the agency to review its interpretation of the tax code and consult with stakeholders in the industry.
The government's backtrack comes amid a stunning backlash to the change from the Retail Council of Canada and thousands of the country's two million retail workers.
