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Tax concessions for charities : competitive neutrality, the tax base and "public goods" choice

Sadiq, Kerrie & Richardson, Catherine (2010) Tax concessions for charities : competitive neutrality, the tax base and "public goods" choice. Australian Tax Forum, 25(4), pp. 401-416.

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Abstract

It is argued that concerns arise about the integrity and fairness of the taxation regime where charitable organizations, which avail themselves of the tax exemption status while undertaking commercial activities, compete directly with the for-profit sector. The appropriateness of the tax concessions granted to charitable organizations is considered in respect of income derived from commercial activities. It is principally argued that the traditional line of reasoning for imposing limitations on tax concessions focuses on an incorrect underlying inquiry. Traditionally, it is argued that limitations should be imposed because of unfair competition, lack of competitive neutrality, or an arbitrary decision relating to a lack of deserving. However, it is argued that a more appropriate question from which to base any limitations is one which considers the value attached to the integrity of the taxation regime as a whole, and the tax base specifically compared to the public good of charities. When the correct underlying question is asked, sound taxation policy ensues, as a less arbitrary approach may be adopted to limit the scope of tax concessions available to charitable organizations.

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ID Code: 49735
Item Type: Journal Article
Keywords: Tax concessions for charities, integrity and fairness of the taxation, charitable organizations
ISSN: 0812-695X
Subjects: Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > ACCOUNTING AUDITING AND ACCOUNTABILITY (150100) > Accounting Auditing and Accountability not elsewhere classified (150199)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Accountancy
Deposited On: 19 Apr 2012 09:39
Last Modified: 19 Apr 2012 09:39

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