The New Zealand Taxpayers’ Union is holding Tainui’s low tax payment in a bumper profit as an example of how charities get away without paying tax.
The Waikato-based iwi announced a record $137.8 million profit on Sunday and has assets worth more than $1 billion.
The tribal authority Te Whakakitenga o Waikato only paid $12,000 in tax because most of the tribe’s commercial investments have charitable status, the lobby group says.
“While politicians complain about overseas companies like Google and Facebook not paying their fair share of tax, everyone is turning a blind eye to these enormous tribal and religious empires which pay almost no tax, despite only a tiny proportion of the profits going back into the communities they are meant to serve. It is a disgrace,” says Jordan Williams, executive director of the Taxpayers’ Union.
Charitable companies, whether they are owned by a tribe, church, or any other group deemed charitable, should only have the tax privilege based on the actual amount that is spent on charity, the lobby group says.
Companies like Go Bus and Sanitarium are given a 28 percent competitive advantage because they don’t pay any company tax, even if all the profits are reinvested.
“That’s wrong, and it’s about time people started taking notice,” Mr Jordan says.
The Taxpayers’ Union believes that only those profits actually distributed to charity should be tax-free.
Revenue Minister Judith Collins told Three’s The Nation on Saturday she had asked for advice on whether corporate charities should pay tax, after concerns were raised.
But she said the issue was not a top priority for her at the moment.
“I think it is significantly difficult for a lot of businesses if they’re dealing with any competitor who they believe isn’t paying their fair share of tax,” said Ms Collins.
“If anyone does believe someone should be paying tax and they’re not paying it and rorting the system as such, they [should report it… but] that’s not the biggest priority I have right at the moment.”
NZN / Newshub.