Arguing that the existing limit of Rs 100,000 is insufficient given the rising demand for donations from different political parties and organizations, they are requesting the government to raise the limit to Rs 500,000.[break]
According to the act, one cannot deduct more than Rs 100,000 as expenses for donation before declaring profit.
Fed up by increasing demands for donation, the business community recently unveiled ´Business Code of Conduct Concepts´, declaring that they would maintain transparency while giving donation. Business people had also declared that they would not give any kind of donations, present, services or facilities to any political person or party with the intention of benefit.
“There is a need to make amendment to the Income Tax Act as it doesn´t allow business people to deduct donation amount more than the allowed limit of Rs 100,000,” Surendra Bir Malakar, general secretary of National Business Initiative (NBI), told Republica.
On the back of allegations that business people donations to different people without maintaining transparency of accounts, the code of conduct has set ethics at three different areas -- consumer protection, tax and financial accountability; labor, environment and anti-corruption; and competition and market protection.
Malakar also said business people are preparing to meet Finance Minister Shankar Prasad Koirala to request for increasing deductible limit for donation. “The government has to increase the deductible limit for donation to Rs 500,000 so that business people can maintain account in a more transparent way,” said Malakar.
Rajan Khanal, chief of Revenue Management Division under the Ministry of Finance, said the threshold for deductible donation expenses can´t be changed without making amendment to the Income Tax Act.
In the absence of parliament, the government will have to issue ordinance to amend the act.
The code of conduct prepared by the business community explicitly focuses on donations and gifts at a time when business people are lobbying for developing a system where they can include donations given to political parties in their account.
Opposing the forced donation from different organizations, representatives of NBI has requested Election Commission (EC) to impose a ban on collecting involuntary donation from business people during the elections. Responding to the NBI delegation, Chief Election Commissioner Neel Kantha Upreti assured that EC will strictly discourage forceful donation collection in the upcoming elections.
In what might be called a positive response from political parties on business people´s call for transparency in donation collection process, Nepali Congress has recently declared that it would accept donation only through check. The party has also unveiled its account numbers to possible donors within and outside the country.
Similarly, CPN (UML) also making efforts to maintain transparency in donation receipts. The party has also declared that it would encourage donors to use banking channel while providing donation to it.
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