Barry Streek
The government continues to send mixed messages on its tax policies and approach to NGOs.
In the National Council of Provinces last week, Minister of Education Kader Asmal expressed strong support for the role of NGOs. But in a memorandum attached to the National Student Financial Aid Scheme Bill, it emerged that the Department of Finance had opposed granting tax incentives to encourage private sector contributions to the scheme.
It said that the department had “resisted” any inclusions of tax benefits in the Bill because “this may have an eroding effect on the tax basis of the country”.
But this very same argument was criticised by the Katz commission , which said much of the “antiquated language” of the tax provisions for NGOs was “derived from old English law with its ancient formulations originating in the Preamble to the Charitable Uses Act of 1601.
“In terms of these archaic Anglo-Saxon formulations, a purpose is considered ‘charitable’ only if it falls within the spirit and intendment of the preamble.”
This preamble refers to the relief of the aged, “maintenance of sick and maimed soldiers and mariners, schools of learning, the repair of bridges and churches and a variety of limited matters, including marriages of poor maids”.
In his speech, Asmal stated: “Let me say quite clearly that I embrace enthusiastically the role of NGOs here. We cannot function without that. We talk of partnerships between the provinces and central government, but there is another partnership outside, namely the partnership with NGOs.
“I think it is very important that we should embrace them, because their role is especially significant in the areas where we have not been able to pronounce with great determination, and these are early childhood education and special education.”
Meanwhile, the National Assembly’s portfolio committee on finance has set a deadline for written submissions to Parliament on the Katz commission’s proposals on tax benefits for NGOs as the committee prepares to hold public hearings on fiscal issues affecting NGOs.
The hearings – arising from the commission’s ninth interim report – are scheduled to take place on October 26, but the committee has given notice that individuals and organisations will have to send written submissions by no later than October 1.
The committee also stated that “organisations representing large groups” could make representations to make oral presentations.
Submissions to the portfolio committee on finance should be sent to Andr Hermans, at telephone number (021) 403-3776, fax (021) 461-7969 or e-mail [email protected]