Tax bite on biscuits

Press, 18 March 1988, Page 3

Tax bite on biscuits

The money of Girl Guide [biscuit lovers might after next week be going; to the Government as well as the guide [ movement whenever the famous bisduits are bought. A | Christchurch chartered accountant, Mr Derek Holland, said that based on the December 17 economic statement, the Giri Guide [ Association would be liable to pay income i tax on the profit it made on its biscuits [from March 31 next year. The statement said that if charitable organisations . entered into an [activity for the purpose) of making a profit it would be taxable. I

If neixt year’s Girl Guide biscuit sales begin in April the association might have to pay about 24 per cent of its profit in income ta!x. [The Government had said it [would compensate • charitable organisations for the tax they would pay, but it had not said how. . i i [Mr Holland said the [ compensation might not necessarily be for the same amount as the tax paid by the organisations.

[The Girl Guide .Association’s national director, Mrs Susan dallagher, said that

paying tax could [mean a 40 per cent increase in fees for girls tol join. A fee increase of that amount had been assessed on the basis th[at there would be nd Government compensation. The association) had been forced to do its costing on that j basis ; because the Government had not said whlen and by how much jit would compensate charitable organisations. She said it was difficult for organisations' to run if they did not know what compensation they would get from year to year. ’ Mrs Gallagher said the guides did dot ask for handouts frqm the public. The biscuits were something (people could buy and get value from, as well as) assisting the girls. | The association was concerned that parents and girls put in a lot of effort selling the (biscuits, and might feel less enthusiastic! if part of the money ! raised went to [ the Government in taxes. | ; “I think the main effect will be on our voluntary workers who spend time with the girls and who will have to spend more of their time raising money.” [ The Girl Guide biscuit week is from l9 to Marctj 25.