Review tax exemption status for some groups

The tax authority should review the existing tax exemption schemes granted to certain organisations, such as non-profit organisations (All eyes on Feb 19 Budget to shed more light on tax hike; Jan 2).

Some of these organisations attract huge amounts of sponsorship and donations, or even conduct business activities while granted the tax-exempt status. While their causes are for the general good, they should also be taxed on their surplus generated. This would encourage such organisations to be more efficient in terms of business operations and perhaps tax planning.

At the same time, this would ensure that tax rebates granted to donors for tax deductible donations can be recovered through tax collected from such organisations.

Organisations which provide social services under the umbrella of National Council of Social Service should continue to be tax-exempt as such organisations cater to the really needy social causes.

Increasing the goods and services tax (GST) will hit only the lower-income group though they may be granted rebates in other forms.

I hope the tax authority can review this as part of the Budget 2018 discussion.

Tan Thiam Siew

A version of this article appeared in the print edition of The Straits Times on January 05, 2018, with the headline 'Review tax exemption status for some groups'. Print Edition | Subscribe