The new tax break on donations to the Malta Community Chest Fund is discriminatory unless it is extended to other voluntary bodies, according to the Commissioner for Voluntary Organisations.
On Wednesday, Finance Minister Edward Scicluna announced that companies that donate more than €2,000 to the MCCF will save tax on half the amount given.
Yesterday, speaking during an interview on One radio, Prime Minister Joseph Muscat hinted this initiative might be extended across the sector.
The tax break has been welcomed by President Marie-Louise Coleiro Preca, who said the MCCF needed support to help people requiring cancer treatment.
But the move has also been criticised for putting other voluntary institutions at a disadvantage.
Yesterday, the commissioner, Kenneth Wain, echoed that criticism: “Unless the tax break is extended to the voluntary sector, the initiative is discriminatory and will also augment the advantage that the MCCF has over the other voluntary organisations.
Unfortunately, as a state organisation it is competing with voluntary organisations and charities. It is a very uneven playing field
“The MCCF has the President’s personality to attract more funding, and unfortunately as a state organisation, it is competing with voluntary organisations and charities. It is a very uneven playing field,” he said.
The tax break – which he got to know of through the media – was not good news for the voluntary sector, he said.
Prof. Wain directed the newspaper to the commissioner’s annual report for 2013. In it he notes that the MCCF fundraises aggressively. It has become a powerful fundraising agency “to the obvious detriment of the sector with which it competes with all the advantages of its Presidential backing and supported by all the resources of the State and its entities, including the Public Broadcasting Services which runs a massive campaign throughout the year...”
The Commission was appealing for this tax break to be extended to the entire voluntary sector to reduce the imbalance.
This call was echoed by the Malta Council for the Voluntary Sector, which for the past three years has included this idea in its Budget proposals.
“I don’t think that anyone should direct a company on which organisation it should support and positive discrimination does create an imbalance. It is important that we create a level playing field,” said the council’s chairman Nathan Farrugia.
“This tax break is a positive move as it opens the doors to extending this initiative to the entire sector,” he added.
Mr Farrugia said other countries have similar tax breaks. Gift Aid, for example, was a UK tax incentive without a minimum donation limit through which the benefactor could either claim the tax rebate or add it to their donation.
Meanwhile, reacting to the debate on this tax break during his Sunday political address, Dr Muscat said if this incentive worked it would be widened to include other voluntary organisations.
The measure, he said, was a good start and had to be closely allied with good governance.