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 on Friday.
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
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 Chinese Academy of Social Sciences'
Institute of Sociology, 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 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
"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 with the Chinese
Academy of Social Sciences.
However, Yang said the controversial draft might take another two to three
years before it becomes law.
Yang, director of the academy's 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 hinders China's charity development.
"The law should make establishing charity or public welfare organizations as
easy as registering businesses," Yang said.