We have formally responded to the IRD’s consultation on taxing the not-for-profit sector, focusing on membership subscriptions and related activities. We called for a full Generic Tax Policy Process, opposed taxing member donations or subscriptions, and recommended only third-party passive income, like interest, be taxed.
We highlighted that members receive only incidental benefits and fall under the “core membership” exemption, and we strongly opposed taxing surpluses intended for future projects. We also proposed raising the tax-free threshold to $1 million, rather than the government’s proposed $10,000, to reflect practical realities.
This matters because taxing membership contributions would threaten the vibrancy of New Zealand’s not-for-profits, increase compliance costs, and undermine policy stability. Changing long-standing principles without proper consultation risks widespread disruption, reducing the ability of organisations to serve their communities and support the causes Kiwis care about.
