The Minister of Finance has agreed, after consulting the Portfolio Committee on Finance, to postpone measures to address salary sacrifice schemes relating to residential accommodation.
The proposals to address these schemes were originally made in the Budget, and were intended to counteract the sort of arrangements in which the employer pays the monthly rental for accommodation used by an employee, thereby reducing the employee's taxable income. The Minister wanted to ensure that the employee would be taxed on the value of the costs of providing this accommodation borne by the employer.
These proposals will be postponed until March 1998, but the government remains opposed in principle to this type of scheme and has advised employers and employees to use the intervening period to rearrange their affairs.