The rationale and ethics behind non-profit organizations being exempt from tax

Abstract

The current research paper is prepared to explain the rationale and ethics behind the tax exemption of non-profit organizations. The main purpose of this paper is to explore the understanding of such exemption discussed in various studies. The topic is interesting and attractive to find out the reasons for tax exemption for a non-profit organization to realize its importance. The requirement is to find out the reasons from relevant literature to ensure completeness in this research paper. The overall findings in the current study have clarified that tax exemption for non-profit organizations is essential to mitigate any threat in the future. The research indicates that non-profit organization work according to the welfare policies and rules set by the government. The support of government is mandatory to promote and motivate such welfare practices. Although the revenue budget of the government may face critical issues due to this action, the practices of welfare and well-being should be continued in the same manner. The government authorities should offer further relief to such organizations that they can reduce the financial issues in the long run.