SINGAPORE: Tax-deductible donations to charities reached a whopping S$1.4 billion last year, largely because the Government’s higher tax incentives given during Singapore’s jubilee year spurred donors to dig deeper into their pockets.
In its annual report released on Friday (Aug 12), the Commissioner of Charities (COC) said that the figure is a jump of more than 24 per cent over that in 2014, when such donations amounted to S$1.1 billion.
The higher tax deductions — from 250 per cent to 300 per cent — for donations made last year, were to encourage a spirit of generosity and giving as the country celebrated its 50th year of independence.
In 2015, for every S$1 donated to a registered charity, S$3 was deducted from the donor’s taxable income for the year. There were 2,217 registered charities here last year, 37 more than in 2014. The bulk of the tax-deductible contributions (80 per cent) went to the social and welfare, education and health sectors.
However, the arts and heritage sector saw donations soar to S$149.1 million last year, almost three times higher than the S$55.2 million it received in 2014. Commissioner Low Puk Yeong ascribed this spike to the lifetime funding cap being raised from S$10 million to S$15 million last year for organisations under the Cultural Matching Fund. The fund was set up by the Ministry of Culture, Community and Youth to provide dollar-for-dollar matching grants for private cash donations to arts and heritage charities. In the annual report, Mr Low also noted that anecdotal evidence in recent years suggested that some charities were at greater risk of exploitation for terrorism financing.
In Singapore, there was no evidence that charities have been misused for terrorism financing or money laundering, a spokesperson for his office said. While the office of COC does not restrict the geographical locations to which charities direct their funds or relief aid, it has a regime in place to govern money raised for charitable causes overseas. The office was responding to TODAY’s queries about rules governing charities that raise money for foreign causes, following Israel’s arrest of Mohammad El Halabi, operations manager of Christian charity World Vision in Gaza.
He was charged last Thursday, accused of funnelling about US$7.2 million (S$9.7 million) a year to support Palestinian militant group Hamas. World Vision Singapore previously told TODAY that the money raised here does not go towards its Gaza programmes, and its donors supported programmes in places such as the West Bank and Turkey.
The office of COC said that anyone wishing to conduct or take part in fund-raising appeals for foreign charitable causes must apply for a permit. Applicants need to show what the money is intended for and that the beneficiary is a bona fide charitable organisation. Within 60 days of the end of the fund-raising appeals, the permit-holder has to submit an audited statement of accounts and an acknowledgement of receipt by the intended beneficiaries.
Advising charities to exercise due diligence in knowing their beneficiaries and partners, especially those outside Singapore, the office said: “If there is any reason to believe that a fund-raising appeal has been improperly administered or a charity has been misused for illicit purposes, (we) will look into the matter and take appropriate actions.” To educate charities on the risks of terrorism financing and money laundering, the office has taken various steps, including publishing a guide last May on how they can protect themselves against such risks, and holding engagement sessions.
