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REVIEW OF TAX DEDUCTIBLE GIFT ARRANGEMENTS COULD HIT ENVIRONMENTAL GROUPS

Friday, 21 July 2017

Finance Minister Mathias Cormann has released a discussion paper outlining a number of proposals which he said are aimed at strengthening governance arrangements for deductible gift recipient (DGR) organisations.

The Australian Financial Review reported that the review was likely to target environmental groups. It said, “Rekindling an old row between mining companies and green groups, the paper seeks feedback on whether environmental charities should be required to spend at least 25 per cent, and possibly as much as 50 per cent, of donated money on on-the-ground remediation, such as tree planting. This would effectively cap the amount of money available for advocacy.

"’It's obviously attacking the rights of environmental groups to try and limit what we can spend our money on,’ ACF chief executive Kelly O'Shanassy said.”

The highly controversial House of Representatives Standing Committee on the Environment inquiry into the Register of Environmental Organisations which reported in May 2016 recommended “that legislative and administrative changes be pursued by the Australian Taxation Office to require that the value of each environmental deductible gift recipient’s annual expenditure on environmental remediation work be no less than 25 per cent of the organisation’s annual expenditure from its public fund.”

It also proposed greater disclosure requirements for environmental groups.

Labor members of the Committee issued a dissenting report

Senator Cormann said the Government recognised the benefits DGR organisations provided and wanted to ensure that compliance arrangements supported continued trust and confidence in the not-for-profit (NFP) sector, while minimising the burden of red tape.

He said the discussion paper outlined a number of proposals to strengthen DGR governance arrangements, reduce administrative complexity and ensure that an organisation’s eligibility for DGR status is up to date.

“There are around 28,000 DGR organisations in Australia. DGR status entitles donors to claim tax deductions on their donations,” he said.

“These tax concessions are in excess of $1.3 billion per year and are a significant part of the Government’s efforts to encourage philanthropy and provide support for the NFP sector.”

 

Click below to view source

Treasury - Consultations: Tax Deductible Gift Recipient Reform Opportunities

Ministerial media release: Deductible Gift Recipient Discussion Paper

Australian Financial Review: Government flags tighter tax regime for green groups

House of Representatives Standing Committee on the Environment: Report - Inquiry into the

Register of Environmental Organisations

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