6 August 2008

Late last month, Australian newspaper The Australian reported that "charities and other non-government organisations could lose billions of dollars' worth of tax perks as the Rudd Government's taxation review prepares to examine whether the concessions offered to the $80 billion non-profit sector are justified."

The newspaper report goes on to claim that "most of the country's religious groups, which make up about $25billion of the sector, run commercial enterprises. Among them is the Seventh Day Adventists' [sic] cereal giant Sanitarium, which generates more than $300 million a year.

"Many of the operations have little to do with charitable work but are exempt from various taxes including corporate tax and capital gains tax." 

In a radio interview with the Australian Broadcasting Corporation's (ABC) Religion Report, Rodney Brady, chief financial officer of the Seventh-day Adventist Church in the South Pacific, dispels some of the myth surrounding the church, charities and tax.

Excerpts: 

• "There is a whole range of taxes that Sanitarium pays, such as fringe benefits tax, payroll tax, it's taxed like every other employer...they pay things like stamp duty, GST is paid, so all its tax obligations are met."
• "A lot of people are working on the assumption that churches actually pay no tax, which is far from the truth."
• "[The profits] are used for many church functions, we spread it over a whole range of areas. We don't actually in a budget give a cause and effect. It becomes income for the church and the church is running a range of activities...there's things like hospitals, education, youth programs, a whole range of charitable and welfare programs...it makes resources available for the church to do what it does."
• "When you look at the compliance burden on charities...there has been a huge diversion of resources into compliance. There is accreditation standards, government reporting, taxation issues that have to be dealt with."
  

Read The Australian report.