Govt invites suggestions on how to tax philanthropic activities

FBR moves for a regulated charity sector to weed out extremism

Our Correspondent March 21, 2017
FBR moves for a regulated charity sector to weed out extremism. PHOTO COURTESY: TELEGRAPH

ISLAMABAD: Federal Board of Revenue (FBR) spokesperson Dr Muhammad Iqbal said on Monday that the government was open to suggestions on how to tax philanthropic activities in Pakistan in order to better regulate them.

According to the FBR official, who was speaking at a pre-budget seminar arranged by the Sustainable Development Policy Institute (SDPI) in Islamabad, the government’s focus in the effort would be to extend state-provided health, education and other services to the population since its absence has led extremism to creep up in society.

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“The FBR is already offering a number of incentives to organisations involved in philanthropic work,” said Iqbal. “However, the priority for the government is to invest in the public sector services because leaving it to non-state actors can have unwarranted consequences.”

He added that under the guise of philanthropy, certain organisations promoted extremism in the past; therefore, a foolproof regulation from the government is mandated.

The FBR spokesperson also said that government needed to address the structural issues in the country’s taxation system since many individuals, especially from the privileged classes of the society, are untouched by the system.

“Unfortunately, the privileged classes are not paying their share of taxes, and thus there is not enough money available to invest on the underprivileged. Hence, we need to compensate for structural defects of the system.”

Meanwhile, other speakers at the seminar underlined the need for an improved tax regime and removal of trust deficit between the government and the private sector, especially regarding the efforts in the philanthropy sector.

SDPI’s Dr Shaharyar Toru said that some fundamental aspects of philanthropy sector needed to be revisited.  “It is critical to analyse the impact of fiscal incentives on philanthropy and how a favourable environment could be instrumental in development of the nation’s non-profit sector,” he said.

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On the other hand, Social Action Consortium and Taleem Foundation Chairman Dr Zafar Qadir said that the avenues for public-private cooperation should be explored upon to tap the real potential of the philanthropy sector in Pakistan.

On the occasion, Pakistan Centre for Philanthropy Executive Director Shazia Maqsood Amjad presented a detailed outlook of the philanthropy sector in Pakistan. According to her, the country gives Rs240 billion annually to various charities.

Hashoo Foundation Country Director Ayesha Khan said that the corporate sector was ready to lend its support and provide its input to government for the removal of trust deficit between the government and the private sector.

Published in The Express Tribune, March 21st, 2017.

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Pakistani | 3 years ago | Reply | Recommend Govt. is running out of money now it is going to take money from philanthropic organizations since people trust philanthropic org. with their donations rather than giving zakat to Govt.
Bebul | 3 years ago | Reply | Recommend The first step is to develop a traceable flow of money. i.e disallow all cash donations over PKR 100 by one individual more than two times a month, and penalize both charity and donator in case this is violated. All cash donations over PKR 100 should be made by cheque, plastic card or electronic bank transfer. All charities should have a bank account to receive this. Once they gather history of this for a couple of years, they can look at the flows and decide if taxation is necessary.
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