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Tax Loophole For Maori Charities

11 April 2002

"Dr Cullen has left a gaping tax loophole for Maori charities under Dr Cullen's latest tax proposals," National Revenue Spokesperson Annabel Young MP said today.

"Dr Cullen has made some new rules on the definition of "charity" when the beneficiaries are Maori. "The usual rule is that a charity must be for public benefit so, for example, a charity cannot be for the benefit of one family. "According to Cullen's announcement, Maori charities are to be excluded from this rule and it seems that a trust set up for a family (people connected by blood ties or adoption) can be a charity so long as the beneficiaries are Maori. It will be an extraordinary loophole for those who qualify to access it.

"It is not fair to have one rule for some groups and another for others. Dr Cullen should explain why there is a different tax law for certain groups of the community, in this case Maori, and if there are other sectors of the community who can set up as charities but remain tax-free.

"Many non-Maori would love to be able to have family trusts with tax-free charitable status but they can't," Annabel Young said.


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