Financial Argument for Country’s revocation of St. Luke’s Tax Exemption
The hospital should not remain tax exempted due to various factors which leads the operations of the hospital seem to be like the profitable organization rather than organization for non-profit. One of the reason found was that the company had been enjoying tax exemption on its four properties which were not supposed to be tax exempted and therefore all the properties of the organization were subjected to thorough investigation. Moreover, the company only met 3 requirements out of 8 requirements which are required by the charitable organization to maintain.
The organization had also managed to show progress in its profitability and showed a consistent revenue of about $15 to $20 million which seemed to be like managing the operations of profitable organization. Moreover, the revenue earned by the company was by charging of almost about 40 to 45 percent of markup which is not considered as a trait of not for profit organization. The major motive of the not for profit organization is to work for the benefit of the public and its operation should be supported by the charitable funds i.e. the company should rely on endowments and donations. If the company does not rely on endowments and donations and generate large profits from which business activities are also conducted like purchase of investments then the organization is not supposed to be tax exempted as it signifies that the exemption which not for profit organization received, provided benefits to the organization and not to the beneficiaries who are entitled to get benefit due to the donation and endowment provided to the non-profit organization.
Although the organization was firm in most of their statement regarding tax exemption, but if the organization is making such huge profits and could easily pay taxes without a large impact on their cash flows which they can use for investment purposes as well.As a matter of fact,the adequate investments were not being made by the hospital in the period of 1996 to 1997. Therefore, after considering all the situation regarding benefit for the hospital and benefit for the society; the hospital should not be exempted from taxes and should pay taxes to the government which can be used for the benefits of the people in the society.......
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