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Inland Revenue

Tax Policy

Announcements
PUBLISHED 13 May 2002

Tax and charities changes announced

The maximum tax rebate for donations to charities is to increase from $500 to $630 and the corporate tax deduction will be extended to include close companies listed on the stock exchange, the government announced today. A charities commission will also be set up to approve and register organisations seeking charitable status for tax purposes. For more information see the government's media release.


Hon Dr Michael Cullen
Minister of Revenue

MEDIA STATEMENT

Budget 2002

New deal for charities

The maximum individuals can claim as a tax rebate for donations to charity will be raised this income tax year from $500 to $630, Revenue Minister Michael Cullen said today.

"The 26 per cent increase represents the shift in inflation since 1990 when the rate was last adjusted and is part of the government's response to the Tax and charities discussion document published last year.

The corporate deduction rules would also be liberalised so that a company could deduct for tax donations of up to 5 per cent of net income and would be extended to include a wider range of companies.

"The government places a high value on the contribution charities make to our country and wants to encourage people to donate more. These changes should help but are only a first step," Dr Cullen said.

"We look forward to implementing a programme of more frequent increases once we have a better picture of the size and scope of the charitable sector.

"To this end, we will create a new Charities Commission to approve and register organisations seeking charitable status, monitor their activities, receive annual returns, provide advice and support to the sector and advise the government on charity-related issues.

"This was the strong recommendation of the charities working party in their report to me earlier this year and I am happy to be able to deliver on it.

"The Inland Revenue Department will continue to have an audit function, and will have the authority to deny a registered charity a tax exemption if not satisfied that the purposes of the organisation are charitable," Dr Cullen said.

The working party was chaired by the former CEO of Te Runanga o Ngai Tahu, Sid Ashton, and comprised: Frank Claridge, Treasurer of the Royal New Zealand Foundation for the Blind, Gordon Copeland, Chair of the Inter Church Working Party on taxation, Pat Hanley, Manager of the Non Governmental Organisation of Aotearoa, Judith Timpany, Chair of Philanthropy New Zealand, Hemi-Rua Rapata, Chairman of the Federation of Maori Authorities, and Pat Webster, former Executive Director of the Council for International Development.

Contact: Patricia Herbert [press secretary] 471-9412 or 021-270-9013.