Six of Australia’s largest churches today released a letter written to the Prime Minister asking for resolution of GST issues for the churches.

In frustration, because of a lack of answers from the Government, the churches are concerned that, although they wish to comply with the requirements under the new tax system, lack of resolution prevents them from doing so. A month later they have received no response.

The letter indicates support for the reform but points out that the government has not adequately considered the impact of the reform on the churches

The letter, signed by the Uniting, Anglican, Baptist, Presbyterian, Churches of Christ and Lutheran Churches says:

"The legislation to date fails to take into account the complexities of these churches. We remain concerned that as we approach the implementation of the GST, there are unresolved issues about the treatment of the churches which, if left unresolved, will severely inhibit their capacity to continue to deliver faith, pastoral and community services to the Australian community.

Our concerns, outlined in past correspondence, are more extensively developed in the attached submission which we present for your consideration. This submission has been written by the Uniting Church in Australia and whilst it specifically makes reference to the Uniting Church, the information and concerns are also applicable to the other churches.

We submit that changes to definitions and/or regulations are necessary to take into account church structures. Until these issues are resolved, the churches are unable to obtain registration for GST purposes.

We request your urgent action to ensure that all internal transactions between separate entities of the same church are excluded from application of the GST. We believe the government sought to address this issue by creating sub-entities, but the definitions are too restrictive and do not address the problems of the churches.

Changes to the legislation will not mean a loss of revenue for the government. However it will result in maintenance of the capacity of the church and associated charities to continue to provide critical services otherwise threatened by the cost impost of the GST on internal transactions between entities/sub-entities."

A month after the letter was written we have received no response. In order to assist the implementation of the reform, the government must respond. Lack of resolution only serves to highlight a continuing level of confusion.