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Straight from the source - November 2023

This month, Assistant Commissioner Jennifer Moltisanti discusses key activities for the coming year.

Published 16 November 2023

In May, the Not-for-profit (NFP) Centre moved from the ATO’s Private Wealth business line to the ATO’s Small Business line. The move gave us an opportunity to work with another key business area with an enormous reach in the market. There are over 4.5 million small businesses operating in Australia and they employ almost 7 million people.

Earlier this month the Small Business Executive hosted our Leadership Conference with the theme 'United through Community'. This is something many of us in the NFP Centre live daily, given the support we provide to our NFP and government clients and stakeholders. One of the conference activities focused on priorities, challenges and opportunities. At the end of the conference, each Assistant Commissioner in Small Business was asked to affirm a commitment they made at the conference. My commitment was as follows:

‘NFPs are here to stay! In fact, they'll become more prominent within the community. As a steward of the sector, I will drive integrity and transparency so there is continued confidence NFPs are supported, and only those entitled access concessions. Success will be measured by 3 indicators:

  1. Appropriate visibility of the self-assessing income tax exempt (SAITE) population – I’m aspiring to 95% lodgment by 2026.
  2. A strong, data-driven, assurance program.
  3. Our advocacy and influence on policy settings reflects community expectations.'

Following the conference, I met with my directors to ensure we have the capacity and capability to deliver on expectations. As we mapped our program of work, it became evident that 2024 is going to be a significant year with many activities converging. The key activities are summarised below.

New reporting requirements for self-assessing income tax exempt NFPs

All eyes are on the new reporting requirements for NFPs who self-assess as income tax exempt. As many readers know, non-charitable NFPs with an active Australian business number (ABN) are now required to lodge an annual NFP self-review return to access income tax exemption. Lodgments are required to be made from the 2023–24 income year onward. The questions in the NFP self-review return have been finalised, and we’ll publish them when the supporting guidance is cleared.

Once the questions and guidance are published to our website, we'll increase our communication and engagement. You can expect to see me and my directors at conferences and webinars explaining the changes and supporting NFPs to transition to the new requirements. Our engagement plan is focused on reaching the 157,000 NFPs that need to prepare themselves for the new reporting requirement, so they're ready when Tax Time 2024 begins on 1 July.

We also recently issued a public relations pack comprising:

  • key messages sector stakeholders and tax professionals can issue through their own channels
  • imagery that can be re-used to support messages released on socials, such as Facebook and LinkedIn.

We’ll continue to leverage key networks to reach the vast majority of NFPs, so stay tuned!

Deductible gift recipient reforms and integrity

You’ll recall that in 2017 the government announced 4 deductible gift recipient (DGR) reform measures, to strengthen governance arrangements and reduce administrative complexity. From 1 January 2024, the administration of 4 DGR categories from other government departments will transfer to the ATO. From this date we’ll administer:

  1. environmental organisations
  2. harm prevention charities
  3. cultural organisations
  4. overseas aid organisations.

This change is intended to make all DGR categories consistent in administration, reduce red tape, and simplify the application process for organisations seeking DGR status. We’re almost ready and I’m pleased to report that the machinery of government changes have been finalised. We’ll shortly publish updated guidance on our website outlining the transitional arrangements as well as ongoing requirements.

Associated with the DGR reforms is our role in assuring that DGR-endorsed organisations meet their obligations. DGR endorsed organisations are required to apply income and assets solely for the purpose for which they’re endorsed, and to operate in accordance with their governing documents. We flag this as a key area of focus, and we review DGR endorsed organisations as part of our broader compliance program.

In December, we’re starting a review of the DGR status of the 234 organisations listed in the tax law. We’ll use our regulatory powers provided under s353-20 of the Taxation Administration Act 1953 to review the DGR status of these organisations.

The reviews will focus on proof of activity, purpose and use of donations and will initially prioritise listed DGR organisations that aren't registered with the Australian Charities and Not-for-profits Commission (ACNC), and ACNC registered charities that have not reported donations, followed by the remainder of the population.

Our review of the listed DGR organisations reflects the importance placed on not-for-profits operating in a manner which maintains the integrity of the tax system.

Shaping the tax system

We have an exciting year ahead with many opportunities to strengthen the transparency and integrity of the NFP sector. On 30 November, the NFP Stewardship Group is meeting in Melbourne. Collectively, members of the group provide insights into and stewardship of the system and sector.

The agenda is currently being finalised and we've invited the Blueprint Expert Reference Group to join us. The reference group is progressing the Not-for-profit Sector Development Blueprint. The NFP Blueprint is intended to be a visionary document to ensure the NFP and charity sector is future ready and able to set its own direction to support Australians in need now and in the future.

The reference group recently published its Issues paperExternal Link inviting feedback on the principles and priorities of a national blueprint for Australia's not-for-profit sector. Submissions are open until 20 December and can be made via the DSS engage platformExternal Link.

I’m looking forward to a dynamic conversation that will inform our future administrative roadmap.


And finally, we've released the refreshed It provides a contemporary experience for our clients and is a key component of our Digital Strategy 2022-25External Link. You can access the updated website by clicking a link in the banner at the top of the existing site. In mid-November, the updated (i.e. Public Beta) will become the ‘default’ website when you navigate to On 4 December, the updated website will replace the existing one.

The updated has been built around our clients’ needs and we engaged with over 6,000 clients to create it. I hope you find the experience much improved. Our website is an important channel for NFPs as we continue to implement the new reporting requirements and DGR reforms.

Take care and stay safe.