Concerns aged care NFPs could be hit with payroll tax

Leading Age Services Australia WA (LASA-WA) has accused the State Government of unfairly attacking the not-for-profit aged care sector as part of a bid to tighten available tax exemptions for charities.

Leading Age Services Australia WA (LASA-WA) has accused the State Government of unfairly attacking the not-for-profit aged care sector as part of a bid to tighten available tax exemptions for charities.

Under a Bill currently before the WA Parliament, organisations run for the promotion of trade, industry or commerce would only be entitled to an exemption for payroll tax, land tax or stamp duty if the sole or dominant purpose of the organisation was “the relief of poverty, the advancement of education or the advancement of religion.”

LASA CEO Beth Cameron said she was concerned aged care had not been excluded from the Taxation Legislation Amendment Bill and was due to appear today before a parliamentary committee to seek an exemption for the sector.

The aged services peak body said it was concerned that as an unintended consequence of this legislation, NFP aged care providers could find themselves subject to payroll and land tax.

LASA-WA said it was seeking an amendment to include “the provision of aged care services” in the list of excluded charities.

“This legislation will impact the resources available to care for our vulnerable elderly, and older Western Australians might end up carrying the costs,” Ms Cameron said.

If NFPs aged care providers were affected, the changes would represent a second blow to the sector, following the Federal Government’s decision to cease the payroll tax supplement in the May Budget. The Commonwealth decision, which is due to come into effect from 1 January, will mostly affect private aged care organisations but also some charitable providers that subcontract services such as laundry or catering.

Safeguards

Under the WA Bill, safeguards have been built into the proposed legislation so that affected organisations could apply to the Minister for Finance for the reinstatement of their exempt status. However, there are concerns this could be a long process for aged care providers who are already under pressure from red tape and bureaucratic compliance measures.

The Bill was introduced  in response to government concerns over a precedent set by the State Administrative Tribunal that found the Chamber of Commerce and Industry of Western Australia to be a charitable organisation and therefore eligible for state tax exemptions.

The WA Government said it expects the amendments would result in only a “very small number” of charities being excluded from receiving a state tax exemption.

WA Parliament’s Standing Committee on Legislation is due to report on 20 November.

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Tags: beth cameron, lasa-wa, payroll-tax, tax-exemptions,

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