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Changes To Charitable Donations

Fuseworks Media
Fuseworks Media

A system to allow people to donate to charities straight from their pay will start next year.

Finance Minister Michael Cullen and Revenue Minister Peter Dunne
today confirmed the Government would proceed with the voluntary payroll
giving system.

Other changes would be made to clarify and simplify the law on
how reimbursements and honoraria paid to volunteers in the non-profit
sector are to be treated for tax purposes.

The ministers said the changes would remove problems and associated compliance costs for volunteers.

The changes would be in the next taxation bill to be introduced in June.

About a million New Zealanders participated in volunteer work
and about $350 million a year was donated to charities and other
non-profit organisations.

Previously caps on the dollar amounts of charitable donations that are eligible for tax relief were removed.

Payroll giving would operate through the PAYE system but
employers did not have to agree to it. It would mean people making
donations would get tax relief immediately and no longer have to apply
for rebates.

Mr Dunne said the Government was also looking at other ways to foster charitable giving.

"For example, we are looking at the idea of making it possible
for people to claim tax deductions for non-monetary donations, such as
artworks and other property.

"Similarly, we are reviewing the question of whether imputation
credits should be refundable to charitable organisations, which are not
able to use them under current law."

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