“Taxpaying businesses are at a competitive disadvantage due to certain companies’ tax-free status and this destroys the principle of a competitive marketplace. As I have been calling for since 2016, it’s time to close the ‘charitable tax’ loophole,” says ACT Leader David Seymour.
“When I asked then-Revenue Minister Michael Woodhouse in 2016 if the then-National Government would close the loophole, he said: ‘It was reviewed by the previous Government, and it was found that there was no case for changing the status quo’ and that ‘I am satisfied that we have a tax framework that creates the right incentives for growth and profit’.
“Britain amended this charitable tax loophole in the 1920s and New Zealand is long overdue to do the same.
“Ngai Tahu businesses like Go Bus and Shotover Jet are tax exempt due to the iwi’s charitable status. Even church-owned businesses like Sanitarium or Mission Estate Winery are exempt from company tax due to an archaic and outdated British law classing advancement of religion as a charitable purpose.
"People should be able to get a tax exemption for donating to charity, but when you’ve got companies that are kind of like charity, kind of like a business, then it makes sense to split them.
"If it’s really true that they give all their profits to their charitable side then they won’t pay any tax. But if some people suspect they are getting away without paying tax and not putting as much into charity as they should, that will level the playing field for other competitors.
“Kiwis need lower, flatter taxes, which ACT would deliver through our fully-costed alternative budget. Eliminating tax loopholes and corporate welfare is just a start, we would also get rid of wasteful government spending.
“ACT would simplify the tax system so that work, saving and investment are rewarded. We would take New Zealand from five tax rates on income down to two, reducing the incentive for tax avoidance and sending a message that if you work hard and do well, you get to keep more of your own money.”