China will take measures to ensure the full implementation of tax exemption policies for donors in a bid to vitalize the country's charities, said Li Xueju, Minister of Civil Affairs, on Friday.

Li revealed at a seminar that the opinions for fully carrying out preferential tax policies for donation, drawn up jointly by his ministry, the Ministry of Finance and the State Administration of Taxation, will be released at the China Charity Conference to be held in this November.

China's current taxation law stipulates that domestic enterprises and individuals can have their charitable giving exempted from income tax if the donations are, respectively, within three percent and 30 percent of their incomes.

But they are required to pay income tax for donations exceeding the stipulated proportions, said Han Yujiao, an official with the disaster relief department under the Ministry of Civil Affairs.

Han told Xinhua that even the current preferential policies haven't been fully implemented, and most individuals still pay full taxes although some of their income has been donated to disaster-hit areas, poor families or other charitable purposes.

The ratios of three percent and 30 percent set for donors to enjoy tax exemption are too low, which has frustrated donors, Li said. Proportions may reach above 50 percent in some developed countries.

A latest survey by the China Youth Development Foundation shows that only 100,000 of China's 10 million registered companies have donated to charities, which means that 99 percent of domestic companies have never made any donation.

Meanwhile, the per-capita donation in China averaged 1 US dollar in 1998, and the sum shrank to no more than 1 RMB (US$0.12) in 2000. In sharp contrast, 70 percent of the families in the United States have donated to charities and each household donates an average of US$900 annually, which accounts for 2.2 percent of its total income.

China's current taxation law also specifies that donations can be fully exempted from income tax only when they are made to one of 12 charitable groups and organizations that work in the interest of public welfare as defined by the state, such as Red Cross Society and China Charity Federation.

"The scope should be further expanded," Li said, but gave no details on whether the opinions to be released in the November conference will make breaks in tax exemption in terms of the donation proportions and scope of charities.

(Xinhua News Agency June 18, 2005)