On Friday 27 May, the Assistant Treasurer Hon. Bill Shorten MP released a consultation paper entitled 'Better targeting of not-for-profit tax concessions'. The paper seeks public views on possible approaches to implement the Government's Budget announcement to better target NFP tax concessions to the altruistic activities of NFPs.

It outlines the Government's policy intent, and possible options for reform implementation, including:

• That income tax concessions will apply to profits generated by an NFP's unrelated commercial activities only if those profits are directed to the NFP's altruistic purposes;
• That an NFP will not have access to FBT exemption, GST concessions or DGR support in relation to their unrelated commercial activities;
• That the reforms will not affect small-scale and low-risk unrelated commercial activities, the taxing arrangements regarding mutual income, or the passive income of NFPs;
• That the new arrangements will commence on 1 July 2011, and will initially only apply to new unrelated commercial activities that commence after 10 May 2011; and
• That NFPs with existing unrelated commercial activities will initially be able to continue to use their tax concessions to support these activities, an arrangement which will eventually be phased out.

Anne Robinson is a member of the NFP Reform Council and will be actively participating in this consultation process. It is critically important that charities and other not-for-profits respond to the Consultation Paper, which can be accessed at: www.treasury.gov.au/contentitem.asp?NavId=037&ContentID=2056.