Govt plans 5.0pc tax exemption on CSR
Sunday, 5 October 2008
Doulot Akter Mala
The government is planning to offer 5.0 per cent tax exemption on a part of corporate incomes to be spent on discharging corporate social responsibility (CSR).
A draft report, prepared by the National Board of Revenue (NBR), has recommended the tax exemption offer to encourage CSR activities of the private companies, officials said.
The NBR placed the draft report to the finance adviser for his consideration Monday (September 29).
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.
A high-powered committee of the revenue board has prepared the draft report in line with the instruction of the finance adviser.
Talking to the FE, NBR chairman Muhammad Abdul Mazid confirmed the submission of the report but declined to say anything on the draft report.
"The report has not yet been finalised. The NBR has placed the draft CSR report to the finance adviser, who can make changes in it," he said.
The finance adviser in June last said that the government would consider tax exemption on CSR activities. The decision was made following requests of some big companies that are investing a large amount of money on public welfare.
The private sector businesses, however, claimed that they had to pay corporate tax at 45 per cent on the invested amount of CSR activities. The companies have to slash the volume of investment due to high rate of tax.
In the draft report, the NBR committee has proposed to tag some conditions before offering tax benefit on CSR activities.
A company will have to follow some issues like proper wages, elimination of child labour, right to its woman employees for receiving the tax benefit of government, officials said.
A company will have to be conscious about environmental pollution and must have waste management facility, they said.
The NBR usually receives a number of applications from the renowned big companies seeking tax exemption on invested amount of CSR.
The revenue board often faces problems in this regard due to absence of specific rules on tax exemption, tax officials said.
Earlier, the NBR has given tax exemptions to a number of big corporate houses on their investment in CSR activities on a case-to case basis.
The government is planning to offer 5.0 per cent tax exemption on a part of corporate incomes to be spent on discharging corporate social responsibility (CSR).
A draft report, prepared by the National Board of Revenue (NBR), has recommended the tax exemption offer to encourage CSR activities of the private companies, officials said.
The NBR placed the draft report to the finance adviser for his consideration Monday (September 29).
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.
A high-powered committee of the revenue board has prepared the draft report in line with the instruction of the finance adviser.
Talking to the FE, NBR chairman Muhammad Abdul Mazid confirmed the submission of the report but declined to say anything on the draft report.
"The report has not yet been finalised. The NBR has placed the draft CSR report to the finance adviser, who can make changes in it," he said.
The finance adviser in June last said that the government would consider tax exemption on CSR activities. The decision was made following requests of some big companies that are investing a large amount of money on public welfare.
The private sector businesses, however, claimed that they had to pay corporate tax at 45 per cent on the invested amount of CSR activities. The companies have to slash the volume of investment due to high rate of tax.
In the draft report, the NBR committee has proposed to tag some conditions before offering tax benefit on CSR activities.
A company will have to follow some issues like proper wages, elimination of child labour, right to its woman employees for receiving the tax benefit of government, officials said.
A company will have to be conscious about environmental pollution and must have waste management facility, they said.
The NBR usually receives a number of applications from the renowned big companies seeking tax exemption on invested amount of CSR.
The revenue board often faces problems in this regard due to absence of specific rules on tax exemption, tax officials said.
Earlier, the NBR has given tax exemptions to a number of big corporate houses on their investment in CSR activities on a case-to case basis.