Fringe benefits tax (FBT) is a tax levied on certain benefits provided by employers to their employees. These benefits can include items such as cars, low-interest loans, and private health insurance. FBT is designed to ensure that employees are taxed on the value of these benefits, even if they are not taxed as part of their salary.
There are a number of reasons why employers might want to avoid FBT. First, FBT can be a significant expense for businesses. Second, FBT can add to the administrative burden for businesses, as they are required to keep track of all FBT-able benefits provided to employees. Finally, FBT can create a disincentive for businesses to provide certain benefits to employees, as the cost of the benefit may outweigh the tax benefits.