Parliament

Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 

Charities package should boost donations - Cullen

16 October 2001 Media Statement

Charities package should boost donations - Cullen


The government is working with the charitable sector on a reform package the net effect of which should be to generate greater donations to charities, Revenue Minister Michael Cullen announced today.

“The law will be clarified so that non-profit organisations can claim gst refunds on all their activities, except exempt supplies.

“This move has strong sector support and will be introduced at the first opportunity,” Dr Cullen said. “It will be included in the next tax bill, planned for December this year.”

The rest of the package would be in later legislation, including decisions to:
- raise the maximum rebate rate for individuals from $500 to around $600
- simplify the company deduction rules and allow more companies to claim deductions for their donations.

“These changes will apply from the 2002-03 income year. The individual rebate rate is overdue for an increase as it has not been adjusted for inflation since 1990. This long delay between adjustments is to be regretted.

“The Labour-Alliance government looks forward to implementing a programme of more frequent increases once better information is available and we can be confident that the assistance is well-targeted, “ Dr Cullen said.

The reforms developed out of the response to the Tax and Charities discussion document. It attracted 1682 submissions and a high level of public interest and debate.

“A decision in principle has also been taken to introduce registration, reporting and monitoring requirements for charities claiming tax-free status. This is common in overseas jurisdictions and, from the feedback we have received, is broadly accepted here.

“To ensure the new system works well and has wide acceptance, the government has agreed to consult the charitable sector on the design details - including ways to reduce the compliance costs for smaller charities.

“A working party comprising sector representatives will be appointed and asked to come back to the government with recommendations,” Dr Cullen said.

A proposal to subject the profits retained by charity-owned businesses to the normal corporate tax rate had been dropped because the government considered that the problems it was designed to address would be addressed through the introduction of the new reporting and monitoring regime.

The definition of “charitable purposes” would also be retained without substantial alteration. Dr Cullen said it derived from the English Charitable Uses Act of 1601 so there was a real question about whether it was still appropriate.

However, other countries working within the English legal tradition – including Australia – were wrestling with the same problem so it made sense to wait for the results of their work.

In the meantime, the working party would be invited to comment on how the definition might be improved without altering its overall scope.

“The government has decided to remove the tax exemption applying to employee superannuation schemes run by charities as the benefit goes to the employees rather than to the general public and it seems difficult to justify why an employee should be treated differently for tax purposes because of the nature of his or her employer.

“The same reasoning applies to fringe benefits. However the sector has raised with me, both through the submission process and directly, a number of concerns about the practical implications for some charity workers of removing the FBT exemption so I have asked officials to do further work on the issue.

“This government places a high value on the contribution charities make to our society. The reforms the government is announcing today and any future changes will reflect that,” Dr Cullen said.

ENDS


© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On The Peters/Ardern Triumph

There are a lot of good reasons to feel joyful about this outcome. It is what so many young voters – the best hope for the country’s future – wanted.

Far more important than the implications for the Economy Gods (is the dollar up or down?) the outcome will also mean many, many vulnerable New Zealanders will have a better life over the next three years at least.

Yet the desire for change was in the majority, across the country... More>>

ALSO:

.

 
 

Submissions Summary: The People's Commission On Public Media

This Summary is a preliminary report from the People’s Commission. It brings together views and aspirations of the hundreds of people who made submissions, attended public meetings, filled out the online survey and made speeches to our Panel. More>>

Housing Plans: Protest Over Ihumatao Development

Ihumatao in Mangere, next to the airport in Auckland, holds the archaeological remains of 1000 years of food production; from when Maori first landed in the area, through to early European settler agriculture and right up until today. More>>

ALSO:

Negotiations: What Does Winston Peters Want His Legacy To Be?

A lot of people in New Zealand seem to resent Winston Peters and the power that he appears to have. “Appears” being the operative word.. More>>

ALSO:

Contains Highly Colloquial Language: Your F**king Guide To Government Formation

The following message is in no way endorsed by the Electoral Commission. They are f**king done with this election. More>>

NZ Emissions Up 50% 1990-2013: Report Confirms CLimate Change Impacting NZ

New Zealand is seeing impacts of excess greenhouse gas emissions in our climate and oceans, according to the latest national report from the Ministry for the Environment and Stats NZ about the state of the atmosphere and climate. More>>

ALSO:

Wellington.Scoop: Arrests At Blockade Of "Weapons Expo"

“We encourage people in Wellington to get down to the Westpac Stadium now for a day of awesome peace action. There will be plenty of food, music and activities to keep us sustained through the day.” More>>

ALSO:

Rorschach Restructuring: Inland Revenue Steps Back From Psychometrics

The Public Service Association will be seeing Inland Revenue in Employment Court over its intention to psychometrically test employees reapplying for their roles at the department as part of its controversial Business Transformation restructuring plan. More>>

ALSO:

 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

Featured InfoPages

Opening the Election