No plans to make churches pay tax on business activities - Collins

Revenue Minister Judith Collins says she has no plans to crack down on charities running businesses and avoiding tax.

Companies like Sanitarium are often accused of not paying their fair share of tax because they're owned by charitable organisations or churches, which are meant to use the profits for charitable purposes.

"If profits are going into charitable purposes - which is often religion, education and helping the poor - they would obviously [qualify for tax breaks]," Ms Collins told The Nation on Saturday.

"If it's going into things that are not charitable purposes, then there is a possible breach of the law."

Asked if preaching religion should be considered a charitable activity, Ms Collins said it had been the law "forever" and she has no plans to change it.

"We've got other things we can do in tax, and actually going after charities that are complying with the law and using their profits for charitable purposes... that's not the biggest priority I have right at the moment."

But she did admit companies owned by churches and charitable organisations often do have an advantage in the market.

"I think it is significantly difficult for a lot of businesses if they're dealing with any competitor who they believe isn't paying their fair share of tax," said Ms Collins.

"If anyone does believe someone should be paying tax and they're not paying it and rorting the system as such, they [should report it]."

Ms Collins said Inland Revenue is "almost religious" in its pursuit of every tax dollar that is owed, and potentially illegal activity was for Charities Services, a division of the Department of Internal Affairs, to investigate.

There are no plans to follow Australia's move to only allow tax breaks on income that gets spent directly on charitable activities.

"We don't just 'do the same' like that in New Zealand," Ms Collins said.


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