The Government will not go ahead with plans to tax employer-supplied carparks in Auckland and Wellington.
The backdown was announced in a joint statement from Finance Minister Bill English and Revenue Minister Peter Dunne today.
"The proposal was made as a matter of fairness, because in general we consider that cash and non-cash benefits should be taxed the same way,'' said Mr English.
He said they still thought it was fair to tax employer-supplied car parks, but needed to be "pragmatic''.
"This was considered likely to be one of those proposals from IRD where the cost of compliance, compared with the likely return, made it not worth pursuing,'' he said.