Question NW3247 to the Minister of Finance
10 November 2023 - NW3247
Lees, Mr RA to ask the Minister of Finance
(1)Whether he has found that pronouncements made by a certain foundation on various matters (details furnished) constitute the type of activities that a public benefit organisation (PBO) may not engage in; if not, what is the position in this regard; if so, (2) whether the (a) National Treasury and (b) SA Revenue Service intend to review the approval of the specified foundation (name furnished) as a registered PBO with an 18A classification; if not, why not; if so, what are the relevant details?
Reply:
1. SARS cannot speak to the specifics of a particular case. However, the legal position is that a Public Benefit Organisation (PBO) approved by the Commissioner under section 30 of the Income Tax Act, must conduct one or more Public Benefit Activities (PBAs). These activities are listed in the Ninth Schedule to the ITA. In general, these activities must be conducted in a manner referred to in section 30 of the ITA i.e.
- In a non-profit manner and with an altruistic and philanthropic intent;
- Should not be intended to promote the economic self-interest of anyone beyond reasonable remuneration; and
- Should be widely accessible to the general public at large (not small and exclusive groups).
In determining whether a PBO is conducting the activities as required in law, SARS will consider the merits of each case on the facts and within the framework of the legal provisions available.
2. to reassure the Honourable member that SARS addresses all non-compliance irrespective of who the taxpayer may be without fear, favour or prejudice. Again, SARS cannot speak to the specifics of a particular case. However, where it is discovered that any PBO has contravened the conditions of its approval as stated in law, its exemption will be taken on review and, if necessary, withdrawn and subjected to related tax consequences. All other sanctions available to SARS through the Tax Administration Act also apply to PBOs. Such measures available to SARS include conducting of audits and other administrative actions. In executing its legal mandate, SARS deals with all acts of non-compliance by any PBO without fear, favour or prejudice.