The Rudd Government has welcomed the final passage of legislation in Parliament today giving broad effect to the Government's election commitment to abolish the tax deduction for donations to political parties and independent candidates and members.
The Tax Laws Amendment (Political Contributions and Gifts) Bill 2008, which passed the Senate this afternoon, limits existing provisions that allow tax deductions for gifts and contributions by businesses to political parties and independent candidates and members.
"Businesses will no longer be able to deduct political donations, either under the existing $1,500 capped specific deduction in the tax law, or as a general business deduction," the Assistant Treasurer said.
"This is an important reform which was a commitment of the Australian Labor Party at the 2007 election."
The measure applies retrospectively from 1 July 2008, meaning businesses will not be able to deduct their political donations from that day.
"In reaching the Bill's final form, the Rudd Government has amended its original policy, at the request of the Senate, and has agreed not to remove deductions for individuals," the Assistant Treasurer said.
"Individuals will still be able to claim deductions for donations to political parties and independent candidates and members up to the $1,500 cap."
These gifts and contributions remain subject to the existing conditions outlined in the tax law. Further details are available at www.ato.gov.au.