The government moves to regulate freestyle corporate social responsibility (CSR) activities by private companies into right direction with specific guidelines, sources said.
Finance Minister AMA Muhith has kick-started the move, dispatching a letter that seeks suggestions from research think tanks, chamber bodies and the association of bankers by August 01 for preparing a comprehensive policy on CSR.
The minister's letter went to the apex chamber body, the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), Dhaka Chamber of Commerce and Industry (DCCI), Policy Research Institute (PRI), Economic Research Group (ERG), Bangladesh Institute of Development Studies (BIDS), the Association of Bankers (ABB), Bangladesh Association of Bank (BAB).
"Perhaps there are some guidelines of Bangladesh Bank (BB) that financial institutions are following. Other organisations, including commercial, industrial and agricultural sectors, are conducting their CSR activities in their own ways," he wrote in the letter.
To underpin the need for streamlining the private-sector companies' dispensation of social responsibility the finance minister said questions had been raised on these CSR expenditures.
"They arrange colourful annual award-giving ceremony, serve food, provide education stipend," he said, adding: "There is no specific policy in real sense."
Also, there is no clear idea as to how the initiative for formulation of the policy will be taken, the finance minister wrote.
Only tax waiver on CSR activities is well-defined by the government, he observed.
Under the existing income tax ordinance, companies enjoy 10 per cent tax exemption on the amount that has been spent for CSR.
Talking to the FE, PRI executive director Dr Ahsan H Mansur said although CSR is still premature in Bangladesh, there must be a comprehensive policy to guide the expenditure in right direction.
"Otherwise, CSR expenditure will be done for personal or political or other reasons," he said, adding that the government may intend to regulate the sector into gaining economic activities from CSR activity.
Mainly, commercial banks are doing CSR activities in the country by following specific guidelines of the BB. Other companies are doing CSR activity as per their own policy and directives of their board of directors, he noted.
"We have received the letter from the finance minister and will give our suggestion within the given timeframe," the economist said.
CSR is defined as voluntary activities undertaken by a company to operate in an economic, social and environmentally sustainable manner.
Dr Mansur said as CSR expenditure is enjoying tax-exemption facility, it should be regulated by the government.
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