“A Tax on Care”: Sector Responds to Reprieve on Charity Tax
While the Finance Minister has delayed announcing a charity tax, a national collective of community and voluntary organisations—representing a network of hundreds of charities supporting thousands across Aotearoa—is sounding the alarm: “This would be a tax on care.”
“It would strip back services for children, whānau, and communities—a tax on hospice care, childcare, community support, and even animal shelters,” says Dr Katie Bruce, Chief Executive of Hui E! Community Aotearoa.
“The impact would be deeply felt and far-reaching—not just by charities, but by all of us. It threatens the very foundation of a healthy, caring society.”
Despite the complexity of the issues and the short consultation timeframe, the Government received hundreds of submissions on the Inland Revenue’s issues paper, including from the Community Constellation—a network of peak bodies and capability-building organisations convened by Hui E! Community Aotearoa.
“Receiving 900 submissions on a highly technical, early-stage paper is extraordinary—it shows the depth of concern across the sector,” says Bruce. “Even without a concrete policy from the government, charities can clearly see the damage it could cause. The sheer volume of responses shows it’s struck a nerve—and for good reason.”
Charities are already incredibly stretched according to the Community Constellation. A tax would have pulled essential resources from the people and places that need them the most.
“Taxing charities would erode their capacity to meet growing community need, innovate, and stay viable long-term. It would widen funding and service gaps that both communities and government would be forced to fill—whether for children, housing, hospice care, or mental health support,” says Belinda Himiona, Chief Executive of Social Service Providers Te Pai Ora o Aotearoa
From frontline housing providers, Māori social services, to youth organisations, animal shelters, and environmental groups—these charities are not just support services. They are lifelines.
The organisations representing a diverse backbone of Aotearoa’s not-for-profit sector—who play a vital role in supporting community wellbeing are already seeing increased demand, costs rising and funding shrinking for the community organisations they support.
“Charities are already regulated. We report publicly. We cannot distribute profits. There are existing provisions to deal with those acting unlawfully. If rules are being broken—enforce them. Don’t punish the entire sector,” says Bruce.
The Minister’s acknowledgement of the low estimated revenue—just $50 million—and the complexity of implementing such a tax reinforces the Community Constellation’s view that it’s simply not worth the harm it would cause.
The sector is ready and able to work constructively with Inland Revenue on fair, practical solutions that strengthen integrity without harming public good.
“We look forward to working with the Government to co-design fair, practical options,” Himiona says. “Any changes must avoid unintended consequences at a time when our communities need more support, not less.”
