Draft Report Raises Fears Over FBT Exemption Removal

 ACFID claims that without FBT exemption, many NFPs would face acute financial difficulty. 
 
In its submission, ACFID accuses the draft report of taking for granted many assumptions that FBT causes a skewing of the market, without adequate evidence.  ACFID says the provision of fringe benefits is crucial to the successful recruitment and retention of quality staff in the face of competition from higher incomes offered by government and private organisations. 
 
Without the FBT exemption, ACFID claims NFPs would have to pay an extra $10,000 to each of their full-time employees.  With 1,400 employees across the membership of ACFID, that would result in a wages shortfall of $14 million – a worrying figure as international non-government development organisations make up a small part of the NFP sector.
 
The Productivity Commission was asked as part of the scope of the review to examine the extent to which tax exemptions accessed by NFPs may affect the competitive neutrality (‘A principle that promotes equal treatment of competing organisations to encourage a level playing field’) of the market. 
 
ACFID expresses serious concern that the argument of anti-neutrality raised in the draft report will be used by the Henry Review of Australia’s Future Tax System to abolish the FBT exemption.
 
Like many other submission to the Commission, ACFID also laments the lack of action stemming from previous Government inquires into the Not for Profit sector to which they contributed.      
 
To read the submission in full, click here : www.pc.gov.au/__data/assets/pdf_file/0005/93173/subdr299.pdf
To view all of the submissions, click here : www.pc.gov.au/projects/study/not-for-profit/submissions