Taxation and the not-for-profit sector submission

As a building and construction sector body that represents 17 industry membership associations, the Building and Construction Training Fund (BCTF) has concerns about the ideas/discussion points outlined in Inland Revenue’s ‘Taxation and the not-for-profit sector’ officials’ issues paper.

While we acknowledge the merits of addressing the issue of tax advantages enjoyed by charities that areconducting commercial profit-focused business that may be unrelated to their charitable purpose, we areconcerned that the broad changes put forward in the paper would have adverse outcomes.Of particular concern is the proposal to tax subscription income of not-for-profits, which would undermine the sustainability of some smaller industry associations who rely on subscription income to cover operational costs and provide support to their members. The loss of operating revenue from a new requirement to pay tax on member subscriptions could be the death knell for some smaller industry associations, resulting in a commensurate loss to our sector, and to New Zealand of the public good they deliver.