The Legislation Deficiency of Chinese Charity Incentive Mechanism and Its Improvement

Li Xiang

Journal of Shanghai University of Finance and Economics Vol. 18, Issue 03, pp. 119 - 128 (2016)  DOI:10.16538/j.cnki.jsufe.2016.03.010

Abstract

Charity incentive mechanism is a set of official incentives encouraging wealth flow from the private to charity, thereby enlarging public welfare supply and equalizing social resources allocation, which consists of a raft of tax deduction and exemption on charitable organizations' denoted property and self-operated income. In the process of improving the development of their own charity, all of developed countries take thorough and detailed incentive mechanisms as the keynote of their charity legislation. However, Chinese legislation related to charity fails to reflect the nature that charity law is tax-exemption law, which is also the principle reason for that Chinese charity has so far failed to break through billion scale bottleneck. Therefore, the establishment of efficient incentive mechanisms and adequate guidance with social wealth flow based on learning from the idea of supple-front reform will dramatically boost the development of Chinese charity.

Keywords

charity; incentive mechanism; tax exemption; supply-front reform