10pc tax waiver on CSR investment approved
Monday, 22 December 2008
Doulot Akter Mala
The government has approved tax exemption at the rate of 10 per cent on a part of the corporate income to be spent on discharging corporate social responsibility (CSR). The exemption has been given to encourage private companies to involve themselves in social welfare activities.
The National Board of Revenue (NBR) recently received approval of the finance adviser in this connection. The board will issue a gazette notification in this regard within a short period.
"Tax exemption on CSR might come into effect within this month. We are in the process of issuing a statutory regulatory order (SRO)," said a senior official of the revenue board.
The NBR will specify some sectors which will be entitled to enjoy the tax exemption under CSR activities, he said.
The NBR on its proposal for CSR tax exemption has selected three areas---economic, environmental and social development---where investment will get the said tax waiver.
Under economic sector, agricultural production and processing, crop diversification, employment generation, education and training will be considered as CSR area.
Environmental development includes global warming, ecological balance, pure water management, carbon emission, sea water level, forestry, city beautification and waste management.
Under social development, companies investing in old home establishment, women rights issues, extending donations to HIV-AIDS campaign agencies, welfare activities for disabled, donations for public universities, relief activities following natural calamities, welfare activities for grassroots level of children, acid victims will get the tax waiver.
The revenue board has tagged five pre-conditions under CSR rules that should be followed to enjoy the CSR tax incentives.
Corporate organisations will have to follow labour compliance issues, including proper wages, elimination of child labour, woman workers' right, to be eligible for getting tax benefit, the proposal said.
The organisations will have to be conscious about environment pollution and must have waste management facility, it said.
In last September, the NBR placed the draft report to the finance adviser for his consideration.
The committee in its draft report has recommended some options including 5.0 per cent tax waiver on invested amount of CSR or 2.0 per cent tax exemption on total corporate tax of a company involved in social welfare activities.
"The government has raised the ceiling of tax waiver from 5.0 per cent to 10 per cent following the suggestion of higher authorities," an official said.
A high-powered committee of the revenue board has prepared the draft report in line with the instruction of the finance adviser.
The private sector businesses have long been requesting the government to offer tax waiver on CSR as they have to pay corporate tax 45 per cent on the amount invested in CSR activities.
Last year, the government raised tax exemption limit for donation to charity to Tk 0.5 million from Tk 250,000 aiming to encourage welfare activities.
The government has approved tax exemption at the rate of 10 per cent on a part of the corporate income to be spent on discharging corporate social responsibility (CSR). The exemption has been given to encourage private companies to involve themselves in social welfare activities.
The National Board of Revenue (NBR) recently received approval of the finance adviser in this connection. The board will issue a gazette notification in this regard within a short period.
"Tax exemption on CSR might come into effect within this month. We are in the process of issuing a statutory regulatory order (SRO)," said a senior official of the revenue board.
The NBR will specify some sectors which will be entitled to enjoy the tax exemption under CSR activities, he said.
The NBR on its proposal for CSR tax exemption has selected three areas---economic, environmental and social development---where investment will get the said tax waiver.
Under economic sector, agricultural production and processing, crop diversification, employment generation, education and training will be considered as CSR area.
Environmental development includes global warming, ecological balance, pure water management, carbon emission, sea water level, forestry, city beautification and waste management.
Under social development, companies investing in old home establishment, women rights issues, extending donations to HIV-AIDS campaign agencies, welfare activities for disabled, donations for public universities, relief activities following natural calamities, welfare activities for grassroots level of children, acid victims will get the tax waiver.
The revenue board has tagged five pre-conditions under CSR rules that should be followed to enjoy the CSR tax incentives.
Corporate organisations will have to follow labour compliance issues, including proper wages, elimination of child labour, woman workers' right, to be eligible for getting tax benefit, the proposal said.
The organisations will have to be conscious about environment pollution and must have waste management facility, it said.
In last September, the NBR placed the draft report to the finance adviser for his consideration.
The committee in its draft report has recommended some options including 5.0 per cent tax waiver on invested amount of CSR or 2.0 per cent tax exemption on total corporate tax of a company involved in social welfare activities.
"The government has raised the ceiling of tax waiver from 5.0 per cent to 10 per cent following the suggestion of higher authorities," an official said.
A high-powered committee of the revenue board has prepared the draft report in line with the instruction of the finance adviser.
The private sector businesses have long been requesting the government to offer tax waiver on CSR as they have to pay corporate tax 45 per cent on the amount invested in CSR activities.
Last year, the government raised tax exemption limit for donation to charity to Tk 0.5 million from Tk 250,000 aiming to encourage welfare activities.