West: Millions go to NGOs

IN THE SENATE

CHARITY is a billion-dollar sector that must be regulated, says Government Minister Allyson West.

West noted that the Attorney General had disclosed that Government gives some $500 million by way of subventions and grants annually to non-governmental organisations (NGOs). Indirectly, through money forgone in taxes where companies deduct their charitable contributions, the Minister in the Ministry of Finance says it's to the tune of billions.

In her contribution to the Non-Profit Bill 2019 at the Senate sitting yesterday, West said there was a provision in the Corporation Tax Act which allows the President via the Finance Ministry to approve a charitable organisation as an approved entity. She said these charitable entities reap benefits in that they are entitled to receive funds from companies.

These companies in turn can deduct what they contributed in arriving at their taxable profits.

West said the amount the company can make and deduct was equal to 15 per cent of their chargeable profits. She said in trying to determine what that means in dollars and cents she looked at the tax that companies paid over the last couple of years.

West said oil companies estimated tax contributions for 2018 were $2 billion, which meant that these companies can make a maximum contribution deductible for tax purposes to approved charities of $19 million.

Additionally, West said under VAT legislation approved charitable organisations are allowed to import items for the charitable entity free of VAT.

'If you get an unconditional donation from an international organisation, for example, anybody else receiving this item would have to pay VAT of 12.5 per cent. The charitable organisation can bring this in free of VAT. Again more taxes forgone and bigger contributions to this group of organisations. We are talking potentially billions of dollars on an annual basis going to this sector,' she said.

She said while there is concern for small and vulnerable NGOs, there are members of this sector that are large and attract large contributions from a variety of sources, both proper and improper.

The minister said Government was not seeking to demonise the sector but aiming to put accountability in place. 'But we cannot be naive and think that because you call yourself an NGO that there is no chance that you are getting involved in shady activities. We have to recognise and legislate for the people who are not going to be operating the way an NGO should,' she said.

She said there are a number of large charitable organisations in Trinidad and Tobago that are in control of millions of dollars in property and cash and it must be ensured they operate within establishment. - Anna Ramdass