Inquiry into the implications of removing refundable franking credits
The submission to the Standing Committee on Economics’ Inquiry into the implications of removing refundable franking credits was prepared by the Charities and Not-for-profits Committee of the Legal Practice Section.
The Charities Committee is comprised of lawyers and academics with specific expertise in the area of the law of charity and associated tax concessions. The Charities Committee recommends that the Standing Committee expressly refer in its report to charities and other not-for-profits (NFPs) and to the impact of any reforms for those charities and NFPs.
That is because charities and other NFPs would be materially affected by the removal of refundable franking credits. These entities receive over $1 billion of refunds per year.
The potential fairness reasons for restricting refunds to high income/low tax retirees also do not apply. Further, reducing refunds for charities and other NFPs will reduce the public benefit that they provide for the community and may thus require a replacement direct government grant. Reducing refundable credits for other recipients may also impact on charities and NFPs, for instance by reducing the pool of donations.
You can read the full submission below.