Federal Budget and NFPs
21 May 2007 at 3:29 pm
The Federal Government has announced several measures in its 2007-08 Budget that are directly relevant to Not for Profit organisations.
1. Increasing the GST registration turnover threshold
The annual turnover thresholds for registration for the GST will be raised to $75,000 for businesses and to $150,000for Not for Profit, with effect from 1 July 2007.
As a result of this measure, NFPs with a turnover between the present threshold ($50,000 or $100,000) and the proposed threshold ($75,000 or $150,000) will no longer be required to register for GST.
Those that voluntarily register for GST will have the option of remitting GST annually, rather than quarterly or monthly.
Taxpayers choosing not to register for GST will be able to claim, against their business income, the GST-inclusive cost of deductible business expenses, rather than the GST-exclusive amount. They will not be able to claim fuel tax credits.
2. PAYG instalments paid annually when voluntarily registered for GST
The Federal Government will align the pay-as-you-go (PAYG) payment and reporting requirements with the annual payment and reporting requirements for taxpayers who are voluntarily registered for GST, with effect from 1 July 2008.
Currently, taxpayers can remit PAYG annually only if they are not registered for GST and they meet other eligibility requirements.
This measure will allow taxpayers who voluntarily register for GST, and who report and pay GST on an annual basis, to meet their PAYG obligations on an annual basis, subject to the other eligibility tests.
The measure will reduce the compliance costs of eligible taxpayers, as they will be able to lodge only one Business Activity Statement per year.
3. Higher Education Endowment Fund
The Government will establish a new, perpetual Higher Education Endowment Fund (HEEF) with an initial investment of $5 billion funded from the 2006-07 surplus.
This investment will broadly double the existing financial investments and endowments accumulated in the university sector. The HEEF will be invested to earn income which will be distributed to individual institutions for capital works and research facilities on an annual basis.
The HEEF will be structured so that it can receive philanthropic donations from the private sector and, if asked, manage individual institutions’ endowments. The HEEF will encourage philanthropic support for universities from individuals and the corporate sector.
It is intended that capital contributions will be made to the HEEF from future budget surpluses to grow, over time, a Fund which will finance the building of first class institutions in the Australian higher education sector.
This information was supplied by the Australian tax Office.