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ATO decision to cost remote Indigenous councils over $4million per year

LGANT President, Alderman Kerry Moir today said that a recent decision by the Australian Tax Office (ATO) is estimated to cost remote Community Government Councils over $4 million annually in lost revenue due to changes in taxation rulings.

“Remote Community Government Councils are receiving letters from the Deputy Commissioner of Taxation revoking their status as tax concession charities ,” said Alderman Moir. “The reasoning for this is because Community Government Councils are incorporated under the Local Government Act (NT) and following a recent court case are now recognised as a government body. They are therefore ineligible for tax concessions.

“The ATO acknowledges that these councils, if they were not ‘government bodies’ would have charitable purposes and would be eligible for tax concession charity status”, said Alderman Moir. “The ATO is offering transitional grants but this is only for twelve months”.

“The Local Government Association wrote to the Federal Treasurer in June 2006 suggesting that FBT concessions be made available to remote councils that were handling Aboriginal housing so that their funds for this purpose were treated as GST free”, said Alderman Moir. “Unfortunately this suggestion was rejected”.

“One council, not a particularly large one, has estimated this decision will cost well over $300,000 per year. When Governments are talking about the lack of housing and infrastructure on remote communities this just adds to the problem. It is also a most unfortunate revenue loss for the NT economy”, Alderman Moir said.

Alderman Moir said that she intended to raise the issue with Indigenous Affairs Minister Mal Brough requesting an investigation to determine what could be done in future years to compensate councils for these additional tax burdens and revenue losses. Ends

24 October 2006

Contact: LGANT President Alderman Kerry Moir 0419 303 378

Phil Maynard Manager Information Services 89362890 0429 090833