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ACT moves to change definition of charity

In a move which has flummoxed the Community Council for Australia (CCA) but unfazed the Australian charity regulator, the ACT Government is moving to introduce its own definition of charity with the recent introduction into parliament of the Revenue (Charitable Organisations) Legislation Amendment Bill 2015.

If passed, the legislation will block certain peak bodies and professional groups from claiming charitable status unless they qualify for an exemption.

Whilst the CCA is concerned that the ACT Governement will alienate the whole charity sector if it proceeds with its own definition of charity in the face of an existing national definition and established guidelines to interpret it, the Australian Charities and Not-for-Profits Commission (ACNC) proposes to continue with its efforts to harmonise and streamline the charity reporting process.

Chief Minister of the ACT, Andrew Barr, is adamant that the status of true charities in Canberra needs to be protected by closing a tax loophole currently giving non-charitable organisations access to tax exemptions not intended for them.

“This is not a bill about regulation,” said Mr Barr in commending the bill to the Legislative Assembly on 17 November 2015, “It is a bill about taxation. And the bill provides certainty for all charities by restricting access to tax exemptions for organisations that have a commercial and political focus.”

The ACT Government loses about $2 million per year as a result of the loophole and this is likely to increase. The only organisations affected by the proposed legislation are political parties, industrial organisations, professional organisations and peak industry bodies. 

By tightening the definition of charity, Mr Barr hopes the move will provide more clarity and protection for the genuine charities so that they can get on with the good work that they do.

“This bill does not affect organisations whose predominant activities are charitable. Charities will not be affected in any way by this legislative change, and the contribution these organisations make to our community cannot be underestimated, and the territory government is committed to supporting the important work that they do in Canberra,” said Mr Barr.

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