Not for Profit organisations/Charities will get a $500 million boost but the federal budget will also close a tax loophole.
The government will provide $53.8 million over four years to establish an independent "one-stop shop" to regulate the not-for-profit sector, News Ltd and Fairfax report(Sky News). ACL Chief of Staff Lyle Shelton states that “Because the overwhelming majority of charities with commercial arms plough profits back in to the charity, it is not known why this new tax is necessary and what other administrative burdens might come with it,”
It will mean that from July 1, the organisations/charities will have to pay income tax on the profits they keep hold of in any newly created businesses that do not go back into their charity work. Tightening tax concessions for charities would cost Australia’s 600,000 not for profit organisations more than $50 million annually. According to the Government Budget 2011-2012.The Government will reform the tax concessions provided to not-for-profit (NFP) organisations to ensure they are targeted only at those activities that directly further a NFP’s philanthropic purpose (Budget 2011-2012)
The Government will also seek advice from the states and territories with the intention of developing and introducing a definition of ‘charity’ that can be adopted by all authorities. The adoption of a consistent definition across all authorities would considerably assist the sectors.
Helpandemlpoyme thinks that introducing this would benefit charities who has good intentions and who work hard to achieve their goals and mission. Introducing this would drive away those not for profit organisations that have become a scam. However, this would cost organisations but weighing pros and cons, in long term enforcing tight tax concessions would keep charities that have good social intentions and eliminate charities that are scams.
For further information:
http://www.skynews.com.au/politics/article.aspx?cId=Politics&id=609792&vId=2383955
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