The Chinese government is considering tax breaks on charitable
donations in line with international practice, the Ministry of
Civil Affairs said.
"We are negotiating with taxation and financial departments to
set up a new tax reduction system for donations," said Jiang Li,
vice minister of Civil Affairs, while meeting with seven domestic
charity foundations for orphans.
According to present tax law, corporate donation can be exempted
from income tax only when the amount is within 3 percent of its
annual revenue, the ratio is 30 percent for individuals.
"This policy indicates that the more you donate, the more tax
you have to pay." said Wang Jianlin, chairman of Dalian Wanda
Group, based in northeast China's Liaoning Province.
"New policies would stimulate companies and individuals to
donate," Jiang Li said.
It is estimated that by the end of 2004, about 5 billion yuan
(US$617 million) had been donated to Chinese charities, accounting
for 0.05 percent of the gross domestic product, compared with 2.17
percent in the United States.
"Despite differences in national conditions, such a large gap
should set us thinking," said Xu Yongguang, vice chairman of China
Charity Federation.
(Xinhua News Agency May 31, 2006)