Tax office launches self-review advertising push

Posted on 12 Nov 2024

By Greg Thom, Institute of Community Directors Australia

The Australian Taxation Office (ATO) has launched a new online and social media advertising blitz aimed at promoting its contentious not-for-profit tax changes.

The campaign, running in November and December, aims to remind NFPs of the requirement to lodge a self-review return by the already extended deadline of March 31, 2025.

The move follows revelations reported by the Community Advocate that implementation of the ATO self-review changes has already cost taxpayers more than $5.4 million.

The new ads coincide with updated online guidance explaining the changes, what they mean for more than 155,000 NFPs and how to lodge a self-review return.

Charities are exempt from the changes, which require NFPs to submit a self-review return or risk losing tax concessions.

The new tax requirements have prompted a flood of NFPs to apply to be registered as charities with the Australian Charities and Not-for-profits Commission (ACNC).

The advertising push comes as the ATO changes were heavily criticised in a Senate report handed down last week as part of an inquiry into the implementation of the new guidelines.

The inquiry, instigated by Shadow Charities Minister Senator Dean Smith, recommended responsibility for the changes be transferred from the ATO to the ACNC.

The report also recommended introducing financial thresholds to exempt small, low-risk not-for-profit entities from the requirement to complete the self-review assessment and further extend the deadline for lodging the return.

The ATO has consistently defended the self-review changes, claiming it consulted widely with the sector and the changes are simple to navigate.

However, numerous sector organisations ranging from the Community Council for Australia to Landcare Victoria and the Australian Multicultural Action Network used the Senate inquiry’s public hearing to lambast the new rules.

They outlined complaints including the lack of communication from the ATO, the complexity of the self-review process, the additional impost and stress for small volunteer-run organisations, and the increased costs to NFPs forced to seek expert legal advice, all of which are detailed in the Senate report.

In the latest ATO newsletter targeted at the NFO sector, assistant commissioner Jennifer Moltisanti said about 14,000 NFPs have so far lodged a self-review return but acknowledged that despite the tax office' best efforts to communicate the new guidelines, many organisations have struggled to adapt to the changes.

"When I recently spoke about the new requirements at a forum, I heard that many NFPs were surprised, and even annoyed about the new reporting requirements," Moltisanti said.

"There were organisations in the audience which had never been entitled to self-assess as income tax exempt, had never considered their tax status, or engaged with the ATO.

"In addition to that annoyance, I sensed a general fear of ATO repercussions where organisations were concerned they’d made a mistake."

Moltisanti urged NFPs to stay the course and promised things would get better.

"Like a right-handed person learning to write with their left hand, this first year may be a bit bumpy, but it will smooth out in the end. With the right attitude, attention, and adjustment your NFP can get on with its purpose."