Accountants and tax experts are urging the Government to consider amending tax laws so that companies and individuals can claim back tax from goods they've donated to people in need.
Companies and individuals have been quick to donate goods and services in the wake of the Canterbury earthquake, but the donations are not tax deductible because the Inland Revenue Department considers a gift to mean money.
The chairman of PWC, John Shewan, makes sense to clarify the law, but any amendments should be narrowly defined, so that the system is not abused, and should focus on goods rather than services.
He says changes could be made reasonably quickly if the Government chose to issue an amendment clarifying the law.
Mr Shewan says many people don't realise the tax credit for cash donations means they get one third of their donation back from the Government, so people could afford to be more generous than they otherwise would have been.