Demand for review of tax relief on CDFI investments

Community Development Finance Association says red tape is preventing organisations from becoming accredited

The umbrella body for the community lending sector is calling for measures to simplify tax relief on money invested in community development finance institutions.

Community Investment Tax Relief, which offers higher-rate taxpayers a 5 per cent rebate on money they invest in community finance organisations, was introduced in 2003. But the Community Development Finance Association said red tape prevented many entitled organisations from acquiring CITR accreditation. It said most of the bodies it represented had fewer than 10 employees and the amount of administration involved in claiming CITR was often prohibitive.

 

The organisation has asked the Government to include changes to the process in the Budget later this month. It believes CDFIs should be able to report investment and loan data when they file annual reports, that they should have a longer timeframe in which to lend the money and that they should have more freedom to choose target clients.

"The demand for CDFIs' services is going through the roof," said a spokesman for the CDFA. "They aren't able to service that demand because of a lack of capital. These changes could make attracting capital investment much easier."

The CDFA said it would also ask the Government to take other steps to help the community lending sector in the next two weeks.

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