Religious leaders have directly appealed to Treasurer Jim Chalmers to change proposed tax laws on trusts because they fear charities and not-for-profit organisations will lose almost $3 billion in donations in the first five years of the new tax regime. Source: The Australian.
The warning to the Treasurer suggests the losses in donations could even climb to more than $8 billion if business donations through “business and community partnerships” are included, and would undermine Labor’s own target to double philanthropic donations by 2030.
Catholic, Anglican, evangelical and orthodox Christian leaders have joined Islamic and Hindu religious leaders to call for changes to Dr Chalmers’ proposed 30 per cent tax on trusts as part of the budget plan to raise $88bn.
The religious leaders also pointed to other unintended consequences of proposed changes to testamentary trusts – the so-called death tax – and said those most affected would not be “high-wealth individuals, but ordinary Australian families navigating grief and financial pressure”.
Nineteen leaders of churches, religions and faiths jointly directed an open letter to Dr Chalmers to “convey our concerns with the changes to the taxation of discretionary trusts
The leaders, including Sydney Archbishop Anthony Fisher OP, Anglican Church of Australia Primate Mark Short, Imam Shadi Alsuleiman from the Australian National Imams Council, Archbishop Mar Meelis Zaia of the Assyrian Church of the East, Presbyterian Church president Reverend David Burke, and Surinder Jain from the Hindu Council of Australia, said they believed the impact on charitable donations was “an unintended consequence”.
“The proposal to impose taxation on a discretionary trust at a rate of 30 per cent prior to distribution to beneficiaries will reduce the financial capacity for distributions to charitable and philanthropic recipients,” the leaders said.
“Unless appropriate exclusions are incorporated into the legislation, this is likely to result in a material adverse impact and contraction in funding available to the charitable and not-for-profit sector,” they said.
While charities are exempt from the direct tax, the Churches are concerned that the large amount of money donated through trusts will be reduced as the trustees will have to pay the new 30 per cent tax.
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Labor’s trusts tax raid ‘to cost’ churches and charities $3bn, Anthony Albanese warned (By Dennis Shanahan and Matthew Cranston, The Australian)
