Barry Streek
Parliament’s portfolio committee on finance is to hold hearings next month on tax reforms which could benefit the NGO sector as well as art galleries and museums.
If the reforms – proposed by the Katz commission – are supported by the committee and government, non-profit organisations will be given tax benefits, including exemptions from donations tax.
The chair of the committee, Barbara Hogan, confirmed to the Mail & Guardian that the hearings on the Katz commission’s interim reports, including its report on fiscal issues affecting non-profit organisations, will be held in October. The hearings are likely to generate considerable interest in the NGO and cultural sectors.
The South African NGO Coalition (Sangoco) task group, which is convened by the Non- Profit Partnership (NPP), met in April to discuss the Katz proposals and is acting as an advisory forum on tax issues affecting the NGO sector.
The NPP’s Eugene Saldanah says: “We believe that a more favourable tax regime for non- profit organisations will, far from reducing the fiscus, increase the capacity of the state and reduce demands.”
In general, the task group’s reception of the Katz proposals is positive and it is happy to note that the report incorporated a number of key recommendations made to the commission by Sangoco, the Charities Aid Foundation and the South African Grantmakers’ Association.
However, it found the report to be “wanting in certain respects, particularly as regards recommendations on donor deductibility”.
“Government has introduced a range of tax incentives to reorient private sector spending. We believe the same priority should be given to the non-profit sector so that funds for social development can be prioritised and encouraged,” Saldanah says.
The Katz proposals include provisions for non-profit organisations to trade and to participate in unlisted empowerment opportunities, and for community property organisations to own property.
It is also proposed that cash-strapped art galleries be given the same tax benefits as non-profit organisations, a move which could save these institutions with tax- deductible donations.
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