More tax benefits for CSR
The government is mulling over increasing tax incentives to encourage companies to spend more for social welfare as part of their corporate social responsibility in the upcoming budget.
Under the scheme, the government may hike tax rebate benefit for CSR spending from the existing 10 percent to 20 percent in fiscal 2014-15, finance ministry officials said.
The expenditure ceiling for CSR will also be raised to Tk 12 crore from the existing Tk 8 crore a year, the officials added.
The move comes in the face of demands from different quarters including businessmen to increase incentives to inspire firms to spend for social causes as part of their corporate responsibility.
The government first extended tax benefits to companies for CSR activities in 2008.
Currently, companies which pay taxes between 27.5 percent and 45 percent on their annual incomes get tax discount for their CSR activities in over 20 categories.
The categories include donations to: victims of natural disasters, old homes, organisations working for especially able persons, schools for floating children, residence of slump dwellers, specialised hospitals for free treatment of poor.
In addition, donations to government-approved educational institutions for establishing computer labs, public universities, vocational training institutes for migrant workers, liberation war museums and organisations nationally engaged to preserve the memories of the Father of the Nation, are also counted as CSR.
Insiders said two new areas—donations to research and disaster management—may be included in the list of categories eligible for the tax rebate scheme.
Banks have been the biggest spenders on CSR activities so far. In 2012, their CSR spending stood at Tk 304.67 crore, up 39 percent year-on-year.
The companies have to comply with some rules to get the benefit. The companies must be tax-compliant and repay loans regularly. The firms will have to regularly pay salaries to employees, and if the entity is engaged in industrial production it must have waste treatment plant.
The eligible firms will have to obtain tax rebate certificates from the National Board of Revenue by submitting their CSR-related work plans.