The Liberal Government in Ottawa has scrapped a plan to tax the discounts employees receive at their place of work a day after the move sparked widespread condemnation from political and business leaders across Canada.
Canada Revenue Agency (CRA) has removed from its website guidelines to business owners that would have paved the way for new taxes on merchandise purchased with an employee discount. The Minister of National Revenue blamed bureaucrats at CRA for hatching a plan to tax employee discounts, a plan she says she never approved.
In a statement sent to the media in Ottawa, Minister of National Revenue Diane Lebouthillier's press secretary said the minister is “deeply disappointed” at the bureaucrats who came up with the plan to tax employee discounts. 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.
“This document was not approved by the minister and we are deeply disappointed that the agency posted something that has been misinterpreted like this,” John Power, a spokesperson for Minister Lebouthillier, said in a prepared statement. “The agency issued a guidance document that does not reflect our government's intentions and the Minister of National Revenue has instructed officials to clarify the wording.”
Shortly after the minister`s statement was sent, the proposed guidelines were pulled from the CRA's website. Later on Wednesday, Prime Minister Justin Trudeau told his Twitter followers that his government has no intention to ``tax anyone's employee discounts.``
The government's backtracking comes amid a swift backlash to the change from the Retail Council of Canada and thousands of the country's two million retail workers who would have been impacted by new taxes levied on the discounts they often receive on clothing, shoes and even meals that they receive from their employer.
Pierre Poilievre, the Conservative finance critic, had called the CRA guidelines to tax employee discounts “insanity.”
