Religious leaders across the country are calling for Prime Minister Anthony Albanese and Treasurer Jim Chalmers to ensure that trusts giving donations to faith-based groups will be exempt from Labor’s tax overhaul. Source: The Australian.
More than a dozen religious leaders, including Sydney Archbishop Anthony Fisher OP and Australian National Imams Council’s president Shadi Alsuleiman, have raised concerns that the government’s trusts tax plans will hurt the work that religious charities do throughout the community helping the most vulnerable.
Under current rules, charities receive an estimated $2.9 billion from pre-tax distributions out of discretionary trusts, but under the proposed new laws, those trusts will be hit with a minimum 30 per cent tax, likely drying up philanthropy to charities and not-for-profits.
In a submission to Treasury and the Treasurer, to be distributed today, the religious leaders say they could be deliberately left out because of a recommendation from the Productivity Commission in its 2024 report on philanthropy.
The commission’s recommended changes that would save human rights groups, and charities focused on advocacy and public interest journalism, but left community and sporting groups, educational bodies and religious groups out.
Various submitters to Treasury consultation process on proposed trust taxation have called upon the government to adopt the Productivity Commission recommendation that expands the categories of charities that can claim the status of deductible gift recipients (DGR). If charities and not-for-profits receive DGR status, they would likely retain the same net tax status of discretionary trusts, preserving current levels of philanthropy.
The key request from the religious leaders is “to not only implement the reform proposed by the Productivity Commission but to expand DGR to certain charities to include gifts made by discretionary trusts and companies (not private individuals) to all non-DGR charities (not just those recommended by the PC) and self-assessing NFPs,” the statement said.
The tax on family discretionary trusts is forecast to reap $4.5 billion over the next five years for the federal government.
However, the budget papers do not identify what impact the measure will have on philanthropic giving to charities and income tax exempt not-for-profits (NFPs), the religious leaders said in their submission.
“The budget papers do not identify the burden the reform will place on governments and society, who will be called upon to fill the service gap left by the withdrawal of the charity and NFP sectors.”
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Faith groups demand exemption from Labor’s planned tax on charity donations (The Australian)
