There had been several controversies about the tax perspective on Clothing Allowance, especially for workers in the banking space where always looking sharp and professional is key to their industry. I don’t know your take on the subject, but the Income Tax Act and Practice Note provide better perspective.

From our experience a lot of companies do not fully comply with Section 116 of the Income Tax Act 2015 (Act 896). This section indicates that a resident person shall withhold appropriate tax in accordance with paragraph 8 of the First Schedule when making payment which has a source in the country.