The IRD considers a gift to mean money and in particular not 'money's worth'. Photo / File photo
Accountants are arguing that the Government needs to widen the definition of charitable gifts in the Income Tax Act to cover goods as well as money after the Canterbury earthquakes.
Many people and organisations have given goods and services after recent disasters, particularly the September and February earthquakes in Christchurch.
These gifts are not tax deductible because IRD considers a gift to mean money and in particular not "money's worth", said Jeff Owens of Owens Tax Advisers in Wellington.
He is recommending the definition of charitable gifts under the Income Tax Act be widened.
Owens said he has support from more than 50 accounting and other organisations.
He is recommending that the legislation be amended to define a charitable or other public benefit gift as "a gift of $5 or more or the equivalent value donation of goods or services, provided that gift has a defined asset cost or book value in a registered entity or otherwise provable cost price".
It was more efficient to give goods and services when the giver had expertise or goods in a field that were urgently required.
Companies have given a range of goods, including water and washing machines to help those affected by the earthquakes.
"Many businesses want to do right by those dealing with the aftermath of the devastating earthquakes in Canterbury," said Owens. The amendment would encourage people to give at an important time.
- NZPA
