The Missing Billions

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Brendan

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#111098 23-Oct-2012 23:46

A lot of people have argued that selling state assets is necessary to fund improvements to our country.

A lot more people have argued this is foolish.

Apparently, as much as $6 BILLION dollars is owed by tax dodgers.

Apparently, only $39 million is owed by welfare fraudsters.

Welfare fraudsters get a prison sentence about 60% of the time; Tax evaders get a prison sentence 22% of the time.

Not paying your tax is a highly profitable business, with only a small chance of getting caught and given a heavy sentence.

Government gets about $6 for every $1 it spends chasing tax evaders.

The solution is simple: keep the assets and chase what is already owed.

So why isn't it done?

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#705431 24-Oct-2012 00:07

Brendan: A lot of people have argued that selling state assets is necessary to fund improvements to our country.

A lot more people have argued this is foolish.

Apparently, as much as $6 BILLION dollars is owed by tax dodgers.

Apparently, only $39 million is owed by welfare fraudsters.

Welfare fraudsters get a prison sentence about 60% of the time; Tax evaders get a prison sentence 22% of the time.

Not paying your tax is a highly profitable business, with only a small chance of getting caught and given a heavy sentence.

Government gets about $6 for every $1 it spends chasing tax evaders.

The solution is simple: keep the assets and chase what is already owed.

So why isn't it done?

I would like to know why some international companies operating in NZ get away with paying almost no tax back, and they can do it legally. I am not sure where your 6 million figure comes from, I read recently in the paper that it was about $80 million which is a huge difference. NZ has been borrowing about a billion a month in the past, not sure how much they are currently borrowing though.

NonprayingMantis

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#705432 24-Oct-2012 00:18

marmite article in the herald today said sanitarium pays no tax because it is, supposedly, a religious organisation, despite obviously being a commercial business. It doesn;t even have to go through any sorts of loopholes either. religious things pay no tax for some insane reason.

nakedmolerat

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#705433 24-Oct-2012 00:21

http://www.3news.co.nz/Courts-tougher-on-benefit-fraud-than-tax-dodging--study/tabid/1607/articleID/273541/Default.aspx

Up to $6 billion a year of tax evasion ^

kiwitrc

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#705451 24-Oct-2012 06:14

"Tax evasion, that's the deliberate act of not giving money to the Government that you should give to them,” says Dr Lisa Marriott at Victoria University. “And benefit fraud is the act of deliberately taking money from the Government you're not entitled to.”

Looks like a case of give and take.

Simple, hook the benefit fraudsters up with the Tax dodgers and let the middle man get on with being Government.

Gilco2

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#705453 24-Oct-2012 06:25

I saw that wit Sanitarium not paying tax. Churches and charities dont and should stay that way. Sanitarium should pay tax as it is commercial business. BUT how can we change the law so they pay tax but the likes of Salvation army thrift stores and Waipuna Hospice stores stay tax free. Waipuna Hospice stores pays for care of people with cancer etc. Thrift stores also goes helping community. They are small stores, nothing like Sanitarium.

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TinyTim

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#705467 24-Oct-2012 08:35

Gilco2: I saw that wit Sanitarium not paying tax. Churches and charities dont and should stay that way. Sanitarium should pay tax as it is commercial business. BUT how can we change the law so they pay tax but the likes of Salvation army thrift stores and Waipuna Hospice stores stay tax free. Waipuna Hospice stores pays for care of people with cancer etc. Thrift stores also goes helping community. They are small stores, nothing like Sanitarium.

ANY business can donate all of its net profit to charity, and they won't be taxed on it. See: http://www.ird.govt.nz/business-income-tax/paying-tax/rebates/. So even if Sanitarium were not itself a charitable organisation, they could still donate its profit to charity and not pay tax. Like any other business.

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TinyTim

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#705470 24-Oct-2012 08:42

Gilco2: I saw that wit Sanitarium not paying tax. Churches and charities dont and should stay that way. Sanitarium should pay tax as it is commercial business. BUT how can we change the law so they pay tax but the likes of Salvation army thrift stores and Waipuna Hospice stores stay tax free. Waipuna Hospice stores pays for care of people with cancer etc. Thrift stores also goes helping community. They are small stores, nothing like Sanitarium.

And on what you actually said:

Do you know for sure that how the Seventh Day Adventist Church spends its Sanitarium profits is any less worthy than those other fantastic charities you mentioned?

Kyanar

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#705518 24-Oct-2012 09:45

TinyTim:
Gilco2: I saw that wit Sanitarium not paying tax. Churches and charities dont and should stay that way. Sanitarium should pay tax as it is commercial business. BUT how can we change the law so they pay tax but the likes of Salvation army thrift stores and Waipuna Hospice stores stay tax free. Waipuna Hospice stores pays for care of people with cancer etc. Thrift stores also goes helping community. They are small stores, nothing like Sanitarium.

ANY business can donate all of its net profit to charity, and they won't be taxed on it. See: http://www.ird.govt.nz/business-income-tax/paying-tax/rebates/. So even if Sanitarium were not itself a charitable organisation, they could still donate its profit to charity and not pay tax. Like any other business.

New Zealand Health Association Limited (trading as Sanitarium) is actually a regular registered company, but claims to be a charity on the basis of what they do with their money (see http://www.register.charities.govt.nz/CharitiesRegister/ViewCharity?accountId=580fe12e-831c-dd11-99cd-0015c5f3da29&isGroup=False - you'll find the "Application Record IRD Removed" quite enlightening).

Personally, I don't see that Sanitarium does any of the things it claims to do, so I can't see how it can be allowed to carry on as a charity.

jonherries

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#705564 24-Oct-2012 11:04

Kyanar:
TinyTim:
Gilco2: I saw that wit Sanitarium not paying tax. Churches and charities dont and should stay that way. Sanitarium should pay tax as it is commercial business. BUT how can we change the law so they pay tax but the likes of Salvation army thrift stores and Waipuna Hospice stores stay tax free. Waipuna Hospice stores pays for care of people with cancer etc. Thrift stores also goes helping community. They are small stores, nothing like Sanitarium.

ANY business can donate all of its net profit to charity, and they won't be taxed on it. See: http://www.ird.govt.nz/business-income-tax/paying-tax/rebates/. So even if Sanitarium were not itself a charitable organisation, they could still donate its profit to charity and not pay tax. Like any other business.

New Zealand Health Association Limited (trading as Sanitarium) is actually a regular registered company, but claims to be a charity on the basis of what they do with their money (see http://www.register.charities.govt.nz/CharitiesRegister/ViewCharity?accountId=580fe12e-831c-dd11-99cd-0015c5f3da29&isGroup=False - you'll find the "Application Record IRD Removed" quite enlightening).

Personally, I don't see that Sanitarium does any of the things it claims to do, so I can't see how it can be allowed to carry on as a charity.

More fascinating to me is the amount of disbursements they make, presumably for charity. $9 million in total of which 2.6 goes outside NZ (presumably to the mothership) to 06/11.

It would be very interesting to see who the rest goes to. I would argue that they should pay tax on the amount which is disbursed to themselves (ie. for their own benefit), although this would be very hard to manage through law.

Worth noting they have 37.4 million in the bank and short term securities.

It is probably a smaller business than I expected, and is probably suffering from a lack of available capital (as they probably don't believe in loans (no long term debts) and probably don't want to sell shares...

Jon

Kyanar

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#705585 24-Oct-2012 11:19

jonherries:

More fascinating to me is the amount of disbursements they make, presumably for charity. $9 million in total of which 2.6 goes outside NZ (presumably to the mothership) to 06/11.

It would be very interesting to see who the rest goes to. I would argue that they should pay tax on the amount which is disbursed to themselves (ie. for their own benefit), although this would be very hard to manage through law.

Worth noting they have 37.4 million in the bank and short term securities.

It is probably a smaller business than I expected, and is probably suffering from a lack of available capital (as they probably don't believe in loans (no long term debts) and probably don't want to sell shares...

Jon

As a registered charity, I don't believe they'd be allowed to sell shares.

When you say disbursed to themselves, do you mean furnished to Sanitarium to cover operational expenses? Because that wouldn't be taxable anyway - tax on corporations is on profit not revenue (unlike tax on people, where it's the other way around) so money they use for operational expenditure is counted in costs and is tax exempt.

The money in the bank should be taxed IMO though I'm not sure what basis there is in tax law for taxing capital holdings.

Brendan

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#705628 24-Oct-2012 12:13

mattwnz:
Brendan: A lot of people have argued that selling state assets is necessary to fund improvements to our country.

A lot more people have argued this is foolish.

Apparently, as much as $6 BILLION dollars is owed by tax dodgers.

Apparently, only $39 million is owed by welfare fraudsters.

Welfare fraudsters get a prison sentence about 60% of the time; Tax evaders get a prison sentence 22% of the time.

Not paying your tax is a highly profitable business, with only a small chance of getting caught and given a heavy sentence.

Government gets about $6 for every $1 it spends chasing tax evaders.

The solution is simple: keep the assets and chase what is already owed.

So why isn't it done?

I would like to know why some international companies operating in NZ get away with paying almost no tax back, and they can do it legally. I am not sure where your 6 million figure comes from, I read recently in the paper that it was about $80 million which is a huge difference. NZ has been borrowing about a billion a month in the past, not sure how much they are currently borrowing though.

I did actually say BILLION.

I would like to know that also. But I suspect I know the answer...

It seems in todays world, if you are rich you pay less. You pay less tax, you pay less for loans, insurance, and probably groceries too!

I don't know why people put up with it. Or I do - and am disgusted: we have been taught this flawed economic theory as if it is proven fact. We have been punished and ridiculed if we dare question this new religion - and people right here have done exactly that.

So: with 6 BILLION owing, and only a possibility of 5 billion from asset sales (with attached higher power prices afterward diluting even that benefit) it's pretty obvious what should be done. Rarely do we have a case of having our cake - and eating it too.

It's easy to see who is really running this country, eh?

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Brendan

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#705635 24-Oct-2012 12:18

NonprayingMantis: marmite article in the herald today said sanitarium pays no tax because it is, supposedly, a religious organisation, despite obviously being a commercial business. It doesn;t even have to go through any sorts of loopholes either. religious things pay no tax for some insane reason.

It's a disgusting legacy from hundreds of years of power elite dictating law. In past ages, churches were a power elite, and we are STILL paying for it.

You and me subsidize these organisations with OUR tax.

They talk a lot of mumbo-jumbo, take your money, and create a lot of harm in our society and around the world. It's the biggest scam of the LOT!

These parasitic organisations should be taxed as businesses and treated as such - for that is what they really are and always have been.

Charity? We can do that without the superstitious, dangerous dogma.

old3eyes

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#705643 24-Oct-2012 12:33

Brendan:
NonprayingMantis: marmite article in the herald today said sanitarium pays no tax because it is, supposedly, a religious organisation, despite obviously being a commercial business. It doesn;t even have to go through any sorts of loopholes either. religious things pay no tax for some insane reason.

It's a disgusting legacy from hundreds of years of power elite dictating law. In past ages, churches were a power elite, and we are STILL paying for it.

You and me subsidize these organisations with OUR tax.

They talk a lot of mumbo-jumbo, take your money, and create a lot of harm in our society and around the world. It's the biggest scam of the LOT!

These parasitic organisations should be taxed as businesses and treated as such - for that is what they really are and always have been.

Charity? We can do that without the superstitious, dangerous dogma.

I'm quite sure that if churches and other community organizations that currently help out with their local community in the way of food and clothing hand outs was to be taxed as you say then they would be in their right to say to the Gov that "It's your problem now as you've taxed us for this free work. We will no longer supply food parcels and clothing"

Regards,

Old3eyes

Brendan

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#705649 24-Oct-2012 12:47

old3eyes:
Brendan:
NonprayingMantis: marmite article in the herald today said sanitarium pays no tax because it is, supposedly, a religious organisation, despite obviously being a commercial business. It doesn;t even have to go through any sorts of loopholes either. religious things pay no tax for some insane reason.

It's a disgusting legacy from hundreds of years of power elite dictating law. In past ages, churches were a power elite, and we are STILL paying for it.

You and me subsidize these organisations with OUR tax.

They talk a lot of mumbo-jumbo, take your money, and create a lot of harm in our society and around the world. It's the biggest scam of the LOT!

These parasitic organisations should be taxed as businesses and treated as such - for that is what they really are and always have been.

Charity? We can do that without the superstitious, dangerous dogma.

I'm quite sure that if churches and other community organizations that currently help out with their local community in the way of food and clothing hand outs was to be taxed as you say then they would be in their right to say to the Gov that "It's your problem now as you've taxed us for this free work. We will no longer supply food parcels and clothing"

I said CHURCHES not "other community organisations". Please stick to what I actually said.

'Help out"? Oh, you must mean the tax payer subsidized activity where they use donations given to them in order to maintain their charity status under law, while also typically pushing their corrupt and superstitious system of baseless crap.

If you wish to debate religion and how it's supposedly good, please start another thread. I'll be there.

My point in THIS thread though, is churches should NOT qualify for tax-exempt status simply because they are a church; and if there is a charity component, it should be a net benefit to the community outweighing the expense YOU pay for them.

Sorry if that sounds a bit harsh, but I do not like being mis-quoted and that is what you did.

TinyTim

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#705669 24-Oct-2012 13:14

Brendan:
I said CHURCHES not "other community organisations". Please stick to what I actually said.

Churches are running many community services - e.g. Presbyterian Support, Salvation Army, Anglican Care, foodbanks etc

And you will find that the the government has contracted out so many of its social services to these groups (because it can't afford to provide them itself) that society as a whole become totally dependent on them. It would be simply disastrous if they suddenly stopped (or reduced) providing the services that they do. (And that is why the IRD gives them charitable status under the Charities Act.)

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