That the government is reportedly considering to raise tax incentives to encourage companies to spend more on social well-being as part of their corporate social responsibility (CSR), sounds good. It is thus likely to raise tax rebate for CSR spending from the existing 10 per cent to 20 per cent in the next fiscal year, 2014-15. It has been reported that annual expenditure ceiling for CSR will also be raised to Tk 120 million from the existing Tk 80 million. Corporate taxpayers, including banks and financial institutions and the Federation of Bangladesh Chambers of Commerce and Industry, have been demanding for increasing the ceiling for some time. The government, to recall, began providing tax rebate for CSR activities since 2008. Currently, companies which pay taxes between 27.5 per cent and 45 per cent on their annual income get this rebate for their CSR activities in over 20 specified areas, as listed by the National Board of Revenue (NBR).
Observers have welcomed the latest move by the government as a timely one in that it is likely to inspire firms to spend on social causes as part of their corporate responsibility. More importantly, such incentives are expected to go a long way towards linking CSR with business operations as being integral to their (businesses') long-term strategic goals and objectives - in ushering in a culture that blends profit with social well-being. The categories of CSR activities currently entitled to get tax rebate include donations to victims of natural disasters, old homes, schools for floating children, scholarship programmes for poor but meritorious students, residence of slum-dwellers, specialised hospitals for free treatment of poor people etc. In addition, donations to government-approved educational institutions for establishing computer labs, public universities and vocational training institutes for migrant workers etc. are also recognised as CSR activities.
So far, the biggest spenders on CSR activities are the banks amounting to about Tk 4.0 billion annually. This, in other words, goes to tell that spending on social causes by a large majority of the business houses in Bangladesh has not otherwise been considerable. The activity has largely remained confined to philanthropists who in their individual capacities have been accomplishing commendable jobs in promoting the well-being of the deprived or disadvantaged segment of the country's population. It is an entirely different issue whether CSR is synomous with individual charity or acts of philanthropy that are mostly in the nature of one-go activities. The core concept of CSR involves sustainability and continuity of programmes that are purported to forging close links between the businesses and the society by way of stakeholders' or community's participation in its process for the ultimate purpose of serving the societal needs, particularly of those among the poor or the underprivileged ones.
To see such acts as forming part of the operations of a business house -- small or big -- calls for a planned move from various social segments as well as the government. It need not be stressed that much of the inadequacies facing the country, particularly in mitigating poverty, malnourishment, illiteracy, rural employment and a host of other critical difficulties, could be addressed if the spirit of CSR is instilled in the corporate or business psyche. This has not happened as yet. Many tend to view CSR activities of some organisations as perfunctory, devoid of continuity of actions that in the long run might render them unsustainable. In order that CSR activities become increasingly inclusive and contribute to the image of the business firm, it is important that firms know precisely well the area they plan to engage themselves in, and the benefits likely to occur to the target group/s.
Attempting to boost CSR activities through fiscal rebates is one of the measures, and there may also be other ways to add vigour to such activities. Insiders also feel the necessity of widening the scope of the CSR activities to which, as it has been reported, the government is giving due consideration.
Source:The Financial Express