We are told by our boss, that our housing allowance is part of our income and that we are to be taxed on it. Is this true?
That’s pretty normal in most countries. Any benefits are added to your salary, resulting in the taxable income. The tax will be calculated from there and then deducted; as well the amount of the (non-financial) benefits is taken off, resulting in your payable income.
This applies to housing, company car (based on rent/fuel per month etc.), bonus, ex-gratia or any other benefits.