Endowment by philanthropic people 'should be fully tax-exempted'
Sunday, 9 December 2007
FE Report
Noted economist Professor Wahid Uddin Mahmud said Saturday endowment by any philanthropic people or organisation should be fully tax-exempted in order to establish social responsibility among all the individuals and groups.
Prof Mahmud was speaking at a seminar on corporate social responsibility (CSR). The Bankers' Forum (BF), a platform of the local bankers, organised the seminar with its president MA Khaleque in the chair.
He said: "The government has not kept the provision for tax-free endowment. But this is not enough to encourage philanthropic activities in the era of multifaceted problems being faced in a competitive open market economy."
The government currently allows Tk 0.5 million donation by any individual or group as tax-free for supporting philanthropic activities.
"Besides the existing tax provision relating to the endowment, the anti-graft is also having some adverse impact on philanthropic activities, he said adding many countries in the globe allow tax-free grant for such operations.
He cited an example of a local industrialist who had wanted to endow Tk 100 million for setting up a research lab in Dhaka University (DU) and said the industrialist is now hesitant to do that under the present circumstances.
Underscoring the need for encouraging endowment especially in the aftermath of cyclone Sidr, Prof Mahmud said, in the past, the rich people donated large amounts of funds for setting up new schools and colleges, but now those institutions are being established with the support of public funds.
"The endowment is very imperative at this moment to widen the quality of the education," he said citing the example of different world-renowned universities like Harvard, Cambridge etc., which are running by separate philanthropic foundations.
About the CSR, Prof Mahmud said in the current open market economic system, it is very difficult to define the CSR as some individuals or organisations are utilising the CSR paradigm as their business tools.
"In the absence of the government's negotiations capacity or for some other lackness of it, some foreign companies are making money here instead of performing their responsibility to the society. So, accountability of those companies should be investigated," the economist said.
Prof Mahmud said although Bangladesh is trying to move from a feudal society to a capitalist one, it has so far failed to establish a conglomerate like Indian Tata or Birla in the absence of a proper prospective of an open competitive economy. "Those multi-national companies are working extensively for CSR in their own countries."
"Though the open market economy is "cruel", we have no scope to go back from it. So, we have to utilise it for the betterment of the national economy."
Noting a poor philanthropic practice in Bangladesh, Prof Mahmud said Bangladesh is "not that kind of a poor country where anybody will be starved if all of us share some of our property with the poor".
The noted economist said: "After meeting expenditures for producing quality goods in a people-friendly environment giving adequate salary to the employees in time and maintaining proper business ethics, a good part of the profit of the businesses should be spent for CSR," he opined.
In his keynote presentation, Executive Vice-President of the National Credit and Commerce (NCC) Bank Ltd Ehsanul Ali said the Bankers' Foundation (BF) is trying to establish a hospital where the people could get treatment at a low cost.
The Forum will also try to adopt an income-generating plan for the remitters in Bangladesh so that they can invest here, put an anti-hundi strategy into operation and establish an institution for developing skilled manpower for migration.
Dr Mujibur Rahman Khan, Managing Director (MD) of the Ansar VDP Unnayan Bank, Shahjahan Mian, Acting MD of Karmasongsthan Bank, Kamrul Islam Chowdhry, Deputy MD of Mutual Trust Bank Ltd and Forid Uddin, MD of the Islami Bank Bangladesh Ltd were, among others, present at the seminar.
Noted economist Professor Wahid Uddin Mahmud said Saturday endowment by any philanthropic people or organisation should be fully tax-exempted in order to establish social responsibility among all the individuals and groups.
Prof Mahmud was speaking at a seminar on corporate social responsibility (CSR). The Bankers' Forum (BF), a platform of the local bankers, organised the seminar with its president MA Khaleque in the chair.
He said: "The government has not kept the provision for tax-free endowment. But this is not enough to encourage philanthropic activities in the era of multifaceted problems being faced in a competitive open market economy."
The government currently allows Tk 0.5 million donation by any individual or group as tax-free for supporting philanthropic activities.
"Besides the existing tax provision relating to the endowment, the anti-graft is also having some adverse impact on philanthropic activities, he said adding many countries in the globe allow tax-free grant for such operations.
He cited an example of a local industrialist who had wanted to endow Tk 100 million for setting up a research lab in Dhaka University (DU) and said the industrialist is now hesitant to do that under the present circumstances.
Underscoring the need for encouraging endowment especially in the aftermath of cyclone Sidr, Prof Mahmud said, in the past, the rich people donated large amounts of funds for setting up new schools and colleges, but now those institutions are being established with the support of public funds.
"The endowment is very imperative at this moment to widen the quality of the education," he said citing the example of different world-renowned universities like Harvard, Cambridge etc., which are running by separate philanthropic foundations.
About the CSR, Prof Mahmud said in the current open market economic system, it is very difficult to define the CSR as some individuals or organisations are utilising the CSR paradigm as their business tools.
"In the absence of the government's negotiations capacity or for some other lackness of it, some foreign companies are making money here instead of performing their responsibility to the society. So, accountability of those companies should be investigated," the economist said.
Prof Mahmud said although Bangladesh is trying to move from a feudal society to a capitalist one, it has so far failed to establish a conglomerate like Indian Tata or Birla in the absence of a proper prospective of an open competitive economy. "Those multi-national companies are working extensively for CSR in their own countries."
"Though the open market economy is "cruel", we have no scope to go back from it. So, we have to utilise it for the betterment of the national economy."
Noting a poor philanthropic practice in Bangladesh, Prof Mahmud said Bangladesh is "not that kind of a poor country where anybody will be starved if all of us share some of our property with the poor".
The noted economist said: "After meeting expenditures for producing quality goods in a people-friendly environment giving adequate salary to the employees in time and maintaining proper business ethics, a good part of the profit of the businesses should be spent for CSR," he opined.
In his keynote presentation, Executive Vice-President of the National Credit and Commerce (NCC) Bank Ltd Ehsanul Ali said the Bankers' Foundation (BF) is trying to establish a hospital where the people could get treatment at a low cost.
The Forum will also try to adopt an income-generating plan for the remitters in Bangladesh so that they can invest here, put an anti-hundi strategy into operation and establish an institution for developing skilled manpower for migration.
Dr Mujibur Rahman Khan, Managing Director (MD) of the Ansar VDP Unnayan Bank, Shahjahan Mian, Acting MD of Karmasongsthan Bank, Kamrul Islam Chowdhry, Deputy MD of Mutual Trust Bank Ltd and Forid Uddin, MD of the Islami Bank Bangladesh Ltd were, among others, present at the seminar.