Fed: Charities $1 million out of pocket by GST: St Vincents

AAP General News (Australia)
12-06-1999
Fed: Charities $1 million out of pocket by GST: St Vincents

CANBERRA, Dec 6 AAP - Charities fear they will be $1 million a year out of pocket under
tax rulings being considered by the federal government this week.

An Australian Taxation Office ruling, contained in a consultative committee report
to go to Prime Minister John Howard and Treasurer Peter Costello this week, has confirmed
charitable organisations would be subject to the GST on fundraising activities, including
chocolate drives and fetes.

While they can claim the tax back through rebates, charities will have to choose between
spending $1 million a year to comply with the GST or not claiming the tax back, the St
Vincent de Paul Society said.

"We estimate that it will cost us $1 million per year - every year - to comply with
the legislation if we are going to seek the rebates," St Vincent de Paul spokesman Terry
McCarthy told AAP.

"That's $1 million we won't be able to spend on the poor and needy."

A spokesman for the government tax reform unit said the government had yet to consider
the report.

"The principle is that genuine charitable activities will be GST-free," he said.

Australian Democrats senator John Woodley said the committee, chaired by Deputy Tax
Commissioner Rick Matthews, had bent over backwards to meet the administration concerns
raised by the charities.

"The committee has significantly improved the tax office's understanding of the problems
the charities are having with the GST," Senator Woodley said in a statement.

He said the Senate was set to approve major improvements to the operations of the GST
for charities recommended by the committee.

AAP mfh/apm/de

KEYWORD: TAX DAYLEAD

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