Increase deductions for charity gifts [Press Review]

Increase deductions for charity gifts [Press Review]

Increase deductions for charity gifts

Increase deductions for charity gifts

by Martin Laverty | Aust Financial Review, 11 June 2015

My employer doesn’t pay tax. It’s an 87-year-old company. It’s internationally recognised and trusted. Yet never a cent has been paid in company tax. There’s no rort involved. No offshore avoidance scheme. My employer is an income tax exempt charity. Australia’s most reputable charity, according to last year’s AMR Charity Reputation Index.

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Jeff’s Comments:

Martin Laverty has taken the time to highlight some very worthwhile issues that if acted on would each provide welcome incentive to fundraising efforts in the non-profit sector.

The tax reform paper offers three options for consideration:

  1. 110% tax deductibility
  2. Expansion of payroll giving
  3. Partial deductibility for event ticket and auction sales

In each case the Federal Government will have to weigh up the relative merits between the impact on their income tax revenue and the boost that each respective change could deliver for the non-profit sector.

In Australia, an effective 150% deductibility rate has been used for ‘research and development’ in the past, but we are yet to break through the 100% barrier for tax deductions on donations. Expansion of payroll giving is a logical progression of the current level of payroll giving activity in Australia and deserves serious consideration based on success experienced in other countries. Partial deductibility for event ticket and auction sales is also something that is already provided for in Australian tax law but the rules on thresholds and limits involved have not turned out to be as useable as many had hoped for when they were first established. In fact, the rules on thresholds and limits were softened to some degree after some uproar from the non-profit sector, but I have not heard of too many non-profit organisations using the new rules either so clearly there is scope to do much more on this front as well.

Like Martin Laverty, I will be following these developments with keen interest.

Jeff Buchanan

Jeff Buchanan

Senior Fundraising Consultant at AskRIGHT
Jeff has 15 years experience as a professional fundraiser and consultant, achieving considerable success for several organisations, and recognised by his peers for national awards.

To find out how Jeff can help your organisation, contact j.buchanan@AskRIGHT.com.
Jeff Buchanan

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