Entrepreneur Wang Xiang, 58, used to keep a low profile in
social activities, but he is seen actively lobbying the country's
legislature to improve donation policies at China's annual
legislative session this year.
"I hope the legislature would consider revising tax and donation
rules so that China's charity undertakings will be greatly
boosted," said Wang, board chairman of the Jiangxi-based Beingsong
Group.
Statistics showed that some 100,000 Chinese companies, merely
one percent of the country's total ten million registered firms,
have had a history of making charity donations.
Total personal donations accounted for 0.01 percent of China's
Gross Domestic Product (GDP). While in the United States, average
individual donation in 2003 reached 828.7 dollars.
It's unfair to call the enterprises and the majority public that
have never engaged in donations parsimonious, Wang said.
"They may be reluctant to donate for fear of exposing wealth,
but the country lacks enough incentives to stimulate them to do
so," Wang said.
According to China's tax law, corporate donations can be
exempted from income tax only when the amount is within three
percent of its annual revenue. The ratio is 30 percent for
individuals.
"Under such a policy, I'd rather to pay tax, since the income
tax usually accounts for less than two percent of a company's
annual avenue," Zhang Lei, chief executive officer of a Beijing-
based private company, said.
Despite "unfavorable" tax policies, experts say that China's
charity organizations also need to improve transparency and
simplify donation procedures.
China has approximately 280,000 non-governmental registered
charity organizations.
"Compared with western charity organizations, China's charity
agencies are slow to tell the public how they get the money and
where the money has been used," said Huang Daifang, a deputy to the
National People's Congress, China's parliament.
Statistics showed that the income of China's urban residents is
three times that of farmers. The richest ten percent of the
population owned 40 percent of residential properties, while the
bottom ten percent owned just two percent of the total
properties.
It is estimated that by the end of 2004, about five billion yuan
(US$617 million) had been donated to China's charitable
organizations, accounting for 0.05 percent of the country's GDP. In
comparison, it was 2.17 percent in the United States.
Sources with the Ministry of Civil Affairs said the ministry is
negotiating with taxation and financial departments to set up a new
tax reduction system in line with international practice.
Huang said people's understanding of donation and charity is
regarded as an important means to help the poor in western
countries. "They could also be used in China to help bridge the
widening wealth gap," said Huang, president of the Tellhow Sci-tech
Co. Ltd.
(Xinhua News Agency March 3, 2007)