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Kerre Woodham: High time the charity loophole was closed · The SME Stream

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  Speaker 1: Finance Minister Nikola Willis is promising tax changes ahead for
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  Speaker 1: charities in the closing of loopholes, and the details of
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  Speaker 1: that will be announced in next year's budget and not
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  Speaker 1: before time. You'd have to say there's about two billion
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  Speaker 1: dollars it's estimated an untaxed profit in the charitable sector
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  Speaker 1: and politicians of varying hues have been eyeing up that
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  Speaker 1: revenue potential for some time. I think both Christopher Lux
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  Speaker 1: and Chris Hipkins have said on this show that the
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  Speaker 1: charities loophole is something they want to look at. There's
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  Speaker 1: also the issue of fairness. A number of charities operators businesses,
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  Speaker 1: think high profile ones like Sanitarium and Best Start, and
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  Speaker 1: they compete with non charitable, non charitable businesses that do
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  Speaker 1: not have tax exemptions. The Tax Working Group estimated that
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  Speaker 1: about thirty percent of charities were likely to have some
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  Speaker 1: sort of trading activity. Is a charity not a charity?
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  Speaker 1: Michael Goosemee from the University of Canterbury says, look at
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  Speaker 1: christ College and christ Church. He says their shareholders in
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  Speaker 1: a forestry company, and he says, if they're sending young
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  Speaker 1: men up to the North Island to teach them how
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  Speaker 1: to grow straight pine trees, how to mill timber, how
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  Speaker 1: to market it and so on. That would be advancing
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  Speaker 1: their education under charity law. Fact as they don't. Those
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  Speaker 1: boys wouldn't know a pine tree if it fell on them.
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  Speaker 1: It was a purely commercial operation, same as the chap
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  Speaker 1: down the road growing straight pine trees. The differences one
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  Speaker 1: pays tax, one doesn't. And where's the fairness in that?
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  Speaker 1: I think we need to tighten it up. It's not
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  Speaker 1: so much a loophole as what Michael Goosemy describes as
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  Speaker 1: a failure of the school policy. The fact is there's
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  Speaker 1: provision in the Income Tax Act for exemption for charities.
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  Speaker 1: He would argue that it's too broad, and you'd have
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  Speaker 1: to agree with them in a number of people have
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  Speaker 1: said much the same thing when they have rung in
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  Speaker 1: when the topics come up, and when we've had the
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  Speaker 1: leaders of the parties in for a chat. You've got
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  Speaker 1: Nahoo and their seafood businesses. Michael goose May said, seafood
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  Speaker 1: production is not the same thing as advancing the purposes
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  Speaker 1: of EWI. I mean, while you can get away with it,
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  Speaker 1: go for it. I mean, there are plenty of people
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  Speaker 1: who are setting up trusts to avoid paying you know,
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  Speaker 1: the maximum amount of tax. They're trying to minimize their
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  Speaker 1: tax return. And that's legal at the moment as the
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  Speaker 1: way the law is written. But I think Niicola Willis
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  Speaker 1: is casting a gimlet eye over the law and looking
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  Speaker 1: to tighten it up. We're all agreed, aren't we that
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  Speaker 1: the sooner that happens, the better. We've been going on
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  Speaker 1: like pork chops about sanitarium and you know, some of
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  Speaker 1: the e wei who are operating very very successful businesses,
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  Speaker 1: all well and good to have a charity, you know,
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  Speaker 1: set up your scholarships to send kids off to school,
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  Speaker 1: and you know, grants for housing and health and what
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  Speaker 1: have you. Great, fabulous, But when the loophole exists, you
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  Speaker 1: know it exists. It's been pointed out, people can see it.
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  Speaker 1: Politicians of all shades have said, this is a nonsense.
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  Speaker 1: When we need every last bit of cash. Couldn't we
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  Speaker 1: do with Grant Robertson six hundred million down the back
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  Speaker 1: of the couch right now? We need every last bit
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  Speaker 1: we've got. High time the loophole was closed. I'm just sorry.
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  Speaker 1: It's going to be next year's budget and it couldn't
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  Speaker 1: happen with a stroke of a pen today