Top political advisers have appealed for charity legislation to encourage and regulate charitable activities in the country.

Favorable tax policies for charitable deeds were specially emphasized.

The proposals were put forward during the ongoing plenary session of the Chinese People's Political Consultative Conference (CPPCC) National Committee, by the Central Committee of the Revolutionary Committee of the Chinese Kuomintang and a CPPCC member, Wang Keying.

According to statistics of non-Communist party's the central committee, China's charities depend on donations from overseas to a great extent.

For example, only about 20 per cent of the donations received by the China Charity Federation were from local organizations, with the rest coming from overseas.

Ninety-nine per cent of domestic enterprises never participate in any charitable activities, sources said.

"A charity law is urgently needed," the proposal of the central committee said.

The current laws and regulations did not give enough attention to the protection of donors and charity organizations, according to the proposal.

Domestic corporations' donations are exempt from income tax if the donated amount is within 3 per cent of taxable income. The ratio is 30 per cent for individuals, according to the current taxation policy.

"This means that when you donate more, you pay more in taxes. This is obviously negative for the development of the charity sector," the proposal said.

The non-Communist party's central committee called for a revision of taxation provisions for donors to encourage more charitable behaviors.

The proposal said that some charity organizations were involved in fraud or operating illegally. It added: "Their judicial responsibilities should be ascertained by law."

Wang Keying, one of the top political advisers, shared the same views.

"A lack of laws has become a major restrictive factor for the development of charities," he said.

Born in 1937, Wang was vice-chairman of the Committee of Population, Resources and Environment of the CPPCC National Committee.

There are only just over 100 charity organizations in China while in the United States there are 1.4 million non-profit charity ones, according to Wang.

He advised to enhance the proportion of taxation exemption for donations to encourage more charitable behaviors.

"The operation of charity organizations should have less governmental interference," he added.

(China Daily March 6, 2006)