FBT Threat to NFPs Disappointing
22 April 2014 at 12:04 pm
Budget speculation that the Federal Government has set its sights on changes to Fringe Benefit Tax packages is disappointing given that the Not for Profit sector has been told by Treasury that it is not interested in tax reform, says the Community Council for Australia.
The CEO of the NFP peak body, David Crosbie, says media speculation that the Government is targeting FBT packages is surprising given that the sector has met with Treasury which made it clear that tax reform for the Not for Profit sector is not on the agenda.
However, Crosbie says that if Treasury has changed its mind and singles out FBT as a way of recouping money from the sector then this would have a major impact on the functioning of Not for Profits across the country.
According to the Australian Financial Review newspaper, Treasury is eyeing savings of almost $900 million over four years through a clamp-down on the breaks to employees of public benevolent institutions to cover expenses ranging from meals to overseas holidays.
“If this is the case then it would be a contradiction for the Government to say it supported the Not for Profit sector and then make a unilateral imposition of new tax rules without talking to the sector,” Crosbie said.
“It would be very disappointing if this kind of top down approach by the Government, already seen in relation to the ACNC, was replicated with changes to tax concessions.
“This would also ignore the enormous work already done by the Not for Profit Tax Concession Working Group and the more than 100 submissions from the sector including better ways to do FBT.
“If you are going to take almost $200 million out of sector then please talk to the sector and take notice of the many submissions by the working group.”
One of the Working Groups submissions recommended FBT savings could be offset by allowing all registered charities apart from churches and schools to be given automatic DGR status. The total amount of FBT affecting the Not for Profit sector is estimated about $2.7 billion.
“If this were to happen then this would be an enormous benefit to philanthropy,” Crosbie said.