Corporations and individual donors will now be able to claim tax
deductions for donations to any licensed non-profit public welfare
organization.
The new policy was announced by the Ministry of Finance and the
State Administration of Taxation yesterday.
In the meantime, the draft of the country's first law on charity
is expected to be presented to the top legislature for examination
and approval later this year.
At present only donations to about 20 major charity
organizations are tax deductible, according to a policy issued last
year.
But Ge Daosheng, a researcher at the Institute of Sociology with
the Chinese Academy of Social Sciences (CASS), doubted whether the
policy could be faithfully carried out at all levels.
"The procedures for donors to claim deductions in taxes are
often extremely complicated in many places," Ge said.
Experts have called for legislative transparency and less
government involvement in charity activities.
The Ministry of Civil Affairs, which has overall responsibility
for the nation's charity affairs, said on Wednesday it had finished
drafting the Law of Charity and would submit it to the National
People's Congress (NPC) for examination.
The Beijing Times quoted Vice Minister of Civil Affairs
Li Liguo as saying the law would encourage any kind of charity or
voluntary body to promote public welfare, and would strengthen
supervision of charity organizations in their use of donations.
"There has been a strong voice in recent years to promulgate a
charity law to standardize charity practices and give people more
freedom to participate in public welfare undertakings," said Yang
Tuan, a researcher from CASS.
However, Yang said the controversial draft might take another
two to three years before it becomes law.
Yang, director of CASS' Social Policy Research Center and an
expert involved in the draft law, said a major point of controversy
was the government's role in charity activities.
He said the government should play a less dominant role and give
non-governmental charity organizations more scope to grow.
Yang said the tough requirements for approval from the
government to establish a charity organization hinder China's
charity development.
"The law should make establishing charity or public welfare
organizations as easy as registering businesses," Yang
explained.
(China Daily January 20, 2007)