Australia: Proposal to simplify deductible gift recipient system

Final report due to the Australian government by 11 May 2024

Final report due to the Australian government by 11 May 2024

The Productivity Commission (PC) on 4 December 2023 released a draft report proposing significant reforms to the current deductible gift recipient (DGR) system, which determines which charities can receive tax-deductible donations. The proposed reforms aim to simplify the system, promote fairness, and direct donations towards activities with the greatest community-wide benefits.

The report introduces a three-step assessment framework for evaluating the benefits of an activity, considering the net benefits of government support through tax deductions, and confirming minimal risk of private benefit conversion.

The reforms are expected to increase the number of charities with DGR status from about 25,000 to between 30,000 and 40,000. However, some classes of charitable activity, such as those related to advancing religion and certain educational activities, may be excluded from DGR status.

The report suggests that increased government support to non-government schools over the years diminishes the need for indirect funding through DGR status. As a result, school building funds may lose eligibility for DGR status, affecting approximately 5,000 endorsements.

The public is invited to provide feedback on the proposed reforms, with a final report due to the Australian government by 11 May 2024.

For more information, contact a KPMG tax professional in Australia:

Daniela Chiew |

Emily Shin |



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