Companies slow to cash in on tax change

Companies slow to cash in on potential offered by tax change

Corporates have been slow to respond to the new tax rebate laws which can see them reap a significant return on their giving, said Stephen Tollestrup Executive Director of aid and development agency, TEAR Fund.

“It is tempting for corporates to tighten up on spending in tough economic times but in these days of social responsibility and philanthropy, they can enhance their image and while still reaping a financial reward,” said Mr Tollestrup.

“For instance, some firms may be tossing up whether to give Christmas gifts this year. This has the potential to damage their public image. But instead of giving the usual gifts of wine and chocolates, they could buy TEAR Fund Gift for Life items which will boost their image as being socially concerned, and they will get a significant tax rebate as well.”

Research carried by Nielsen Media Research suggests that a significant number of people make employment and buying decisions based on a business' commitment to corporate social responsibility, said Mr Tollestrup.

Whereas in previous years companies could only claim 5 per cent on charitable donations, they are now entitled to a deduction for all donations over $5 made to donee organisations. This is limited only by the amount of the company's net income. The donation deduction is also being extended to unlisted close companies (companies with five or fewer shareholders).
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This tax law change has moved New Zealand from being one of the meanest in terms of tax rebates on giving to among one of the most generous; similar to the US, he said.

Visit www.giftforlife and click on corporate gifts.

ENDS

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