Time to close ‘charitable purpose’ tax loophole

ACT Leader David Seymour used Question Time today to call on the Government to scrap the ‘charitable purpose’ tax loophole exploited by certain businesses at the expense of others.

“Taxpaying businesses are at a competitive disadvantage due to certain companies’ tax-free status," said Mr Seymour. "This destroys the principle of a competitive marketplace.

“Ngai Tahu businesses like Go Bus and Shotover Jet are tax-exempt due to the iwi’s charitable status. Even church-owned businesses like Sanitarium or Mission Estate Wines are exempt from company tax due to an archaic and outdated British law classing advancement of religion as a charitable purpose.

“While a portion of these companies’ profits may go to charity, they still compete with private businesses and should not be given any unnatural advantage. They can already claim tax back on specific charitable activities, so why do they get a tax loophole for their entire business?

“Let’s support all companies instead of picking winners. We could start by eliminating tax loopholes and corporate welfare, and using the recovered funds to cut company tax for all businesses.”

ENDS

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