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Following is a question by the Hon Bernard Chan and a written reply by the Secretary for the Health, Welfare and Food, Dr Yeoh Eng-kiong, in the Legislative Council today (January 22):
Question:
It has been reported that an organisation which claims to be committed to the promotion of local eco-tourism received donations exceeding one million dollars by organising fund-raising excursions in the past four years. However, its fund-raising accounts are rather disorganised, and most of the money has been spent on the administration of the organisation such as personal emoluments and rent of office premises. In this connection, will the Government inform this Council:
(a) how existing laws monitor this kind of fund-raising activities; and
(b) of the number of charitable bodies currently exempt from tax, and the simple and direct ways through which the public may ascertain if the organisers of fund-raising activities belong to this category?
Reply:
(a) There is legislation to control fund-raising activities in public places and the associated issue of maintenance of order in public places. Section 4(17) of the Summary Offences Ordinance requires a person or organisation to apply for a permit to conduct any collection of money or sale or exchange for donation of badges, tokens or similar articles in a public place for charitable purposes from the Director of Social Welfare, and for other purposes from the Secretary for Home Affairs. Contravention of section 4(17) is an offence punishable with a fine of $2,000 or imprisonment for three months. In issuing permits under section 4(17), the Home Affairs Bureau (HAB) and the Social Welfare Department (SWD) impose a set of administrative controls to regulate order and to ensure transparency and accountability of the fund-raising activities, such as -
(1) the fund-raising organisation is registered under the laws of Hong Kong, such as the Companies or Societies Ordinance; and
(2) the purpose of fund-raising is clearly stated in the permit;
(3) a number of conditions are imposed on the permit which include -
(i) the funds raised will be used for the specified purpose;
(ii) no person will benefit improperly from the collection;
(iii) within 90 days of the last date specified in the permit, the permittees will cause the funds raised, less any reasonable expenses incurred, to be applied or credited to the bank account, for the purpose for which the permit is issued;
(iv) the funds raised will be audited by a qualified accountant and a copy of the audited accounts will be submitted to the relevant authorities within 90 days of the last date specified in the permit.
Applications from organisations which have breached the conditions of a previous permit may not be considered. Both HAB and SWD check compliance with the conditions through, for example, examination of the audited statements submitted by organisations.
In addition, any person who suspects that dishonest, fraudulent or deceptive activities may be involved in a fund-raising event can make a report to the Police to investigate whether any offence under the Theft Ordinance has been committed.
(b) Charitable organisations and trusts of a public character may be granted tax exempt status under section 88 of the Inland Revenue Ordinance (IRO). Donors are entitled to claim a tax deduction for making donations to these tax-exempt charitable organisations. The maximum deduction that the law permits for approved charitable donations is 10 per cent of the donor's net income/profit. As at the end of December 2002, 3,753 charitable organisations have been granted tax exempt status under section 88 of the Ordinance. A list of these tax-exempt charitable organisations is published in the Gazette and is also available on the IRD web site. This enables members of the public to check whether their donations will qualify for a tax deduction.
To facilitate the public to make decisions about making donations, there is an SWD hotline through which, enquiries may be made about whether a charitable fund-raising activity has been approved by SWD or not. Members of the public may also visit SWD's homepage or make use of the Electronic Services Delivery System to see details of recent charitable fund-raising activities which have been issued with permits. As for non-charitable fund-raising activities, members of the public may make telephone enquiries with HAB about whether a particular activity has been approved or not.
End/Wednesday, January 22, 2003
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