Reports say charities may suffer under a bid to close a ‘rates exemption loophole’ in WA.

The WA Local Government Association (WALGA) wants the State Government to close the loophole in the Local Government Act.

WALGA president Lynne Craigie says many organisations claim a charitable or not-for-profit status but still turn a profit, and must start paying their way.

Up to $45.6 million of rates were foregone by local governments across the state last year due to the rates exemptions.

“We now have a lot of organisations that claim a not-for-profit status, or a charity exemption, and that makes them entitled to exemptions from their local government rates,” Cr Craigie told the ABC.

“However some of those are running organisations at a great profit, and therefore should be paying their fair share towards the running of the community.

“If it is a charitable organisation or an organisation that is purely not for profit and just providing a service, local governments have no intent to rate them.

“Our beef is with big organisations that don't pay their fair share.”

She said councils should decide whether they charge rates to profit-making organisations.

“So a small council that has churches can say; ‘Okay, we don't expect rates from you’, but an organisation that's a not-for-profit that has come into town to manage a shopping centre and is taking a profit from that, that should be rateable,” she said.