GST added to cost of borrowed puzzles

Press, 25 February 1988, Page 6

GST added to cost of borrowed puzzles

By SUE LANCASTER Donations for bus outings and jigsaw puzzles are among items for which the Canterbury Aged People’s Welfare Council faces GST bills. The council was still aghast at being charged GST on donations elderly people made for afternoon bus outings when it was further informed this week of the charge on jigsaw puzzles. The 20c donations many old people make when they borrow a jigsaw puzzle is subject to GST. Confusion in the Minister of Revenue’s office yesterday led to several differing answers as to Whether this would b» changed. Ji

The Minister, Mr de Cieene, disagreed yesterday with an earlier statement by one of his spokesmen that the council would still have to pay GST for bus donations under proposed amendments to the GST Act. Mr de Cieene said it was not the Government’s intention to charge GST for voluntary payments made to voluntary organisations. His staff asked that details of the council’s budget be sent to Wellington before a definitive statement could be made. The council’s secre-tary-manager, Mr Charlie Waters, said he was angry that non-profit-making organisations were being charged GST

on voluntary payments for services rendered. “I think the whole thing is disgusting and shows that the Government in its tax gathering has lost all morality,” said Mr Waters. The council took out old people who would otherwise be unable to go out. About $lO,OOO was collected last year through gifts but the service cost $20,000 to run, he said. The council was doing the Government a service by helping elderly people to stay in their own homes. It kept some old people out of hospitals where they would cost the Government substantially more. Mr Waters said it was ridiculous that grants fromji§the Government,

local bodies, and some businesses were subject to GST. Grants from the Government and local bodies are subject to GST if given to an organisation that is registered with the Inland Revenue Department. Any organisation with an income of more then $24,000 must register for GST. Grants from businesses are subject to GST if the business is deemed to be gaining any benefit such as through advertising. Mr Waters said that it would be more honest for the Government to reduce the grants it paid. Paying the whole amount and the council’s paying back UJST was “just crazy.” €