Inland Revenue crackdown on $1.7m in tax breaks for Mormon missionary donations NZ

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Inland Revenue crackdown on $1.7m in tax breaks for Mormon missionary donations NZ

Post by LadyKiwi » Sun Mar 03, 2019 6:23 am

Inland Revenue crackdown on $1.7m in tax breaks for Mormon missionary donations

Inland Revenue has won a legal fight to tax donations of about $1.7 million a year given to Mormon missionaries.

In 2015, Inland Revenue tightened its rules to remove tax credits for donations by Mormon missionaries, their parents and grandparents towards traditional mission work.

The Church of Jesus Christ of Latter-Day Saints, known informally as the Mormon Church, fought the changes, but last month they lost a High Court bid to overturn the move.

Donations by siblings and more distant relatives of the missionary, along with friends and other church members, will still qualify for a tax credit, the court ruled.

A spokesman for the church said they would appeal the ruling on behalf of people who make donations to their "charitable services".

"The church is disappointed with the High Court decision," he said.

The church encourages young members to serve voluntarily overseas for an 18 to 24 month mission, which involves the church member attempting to convert people to their faith and completing community work. Once a church member has completed a mission they can be admitted to temple, which brings certain benefits like being able to marry in temple.

Kiwi sports stars including former Tall Black Paora Winitana put their careers on hold to become missionaries. Kiwi league player Krisnan Inu opted out of his mission at the last minute, while another promising league player, Samoan international Young Tonumaipea, will quit the NRL later this year to win hearts and minds for the church in Germany.

A missionary is expected to raise a 'standard amount' before their mission, which recently was $475 a month or $5700 a year. There are about 300 New Zealand Mormon church members on missions overseas, which makes the donations worth roughly $1.7m a year.

Otago University student Dallin McLaughlin completed his mission in the Philippines from December 2015 to November 2017.

He raised $2000 of the $9,000 required for the mission by working odd jobs. The remaining $7000 was donated by his parents.

He said most of his time in the country was spent attempting to convert people to his church. He also helped people in the community.

"The happiness you feel when you help people, whether they are going through natural disasters or have conflict at home, has made me want to help more people."

The New Zealand church received $43m in total donations during 2017, with a total income of $106m and $322m in assets, according to Charities Services filings.

Peter Lineham, an expert in religious history, said missionary work was an integral part of the Mormon church.

"It is almost a rite of passage to do your missionary service," he said.

"There is strong pressure for their own families to help their overseas missions. It is assumed that the families will underwrite the costs."

An Inland Revenue spokeswoman could not provide details of the case because it was still in the appeal period and they cannot comment on individual tax matters.

She said the tax rule change was not a "general policy or legislative change".

"Whether a payment is a charitable gift and eligible for donation tax credit claims is assessed on a case by case basis," she said.

"It's important all taxpayers pay their fair share and it's the commissioner's duty to protect and enhance the integrity of the tax system."

She could not provide figures on how much Inland Revenue spent defending the case because it "would take time to collate and I'm still not sure we would be able to release the information."

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