Tax Deduction For Singapore-Registered Charities Working Abroad

Date: 9 July 2012

To ask the Deputy Prime Minister and Minister for Finance:

Whether the Ministry will introduce single tax deduction for Singapore-registered charities working abroad and review the 80:20 rule where these charities have to spend 80% of the net proceeds raised from the public in Singapore.

Reply by DPM and Finance Minister Tharman Shanmugaratnam:

1. We recognise that Singapore-based charities often wish to do philanthropic work abroad. Hence, in 2007, we relaxed the 80:20 rule with respect to the use of private donations for overseas work. They can also seek donations for overseas disaster relief.

2. We have sought to balance this against the needs of the charitable sector in Singapore, which is still developing. Allowing a tax deduction and lifting the 80:20 rule altogether would mean more resources (including foregone tax revenue) being channelled overseas, which could otherwise be used to strengthen charitable activities in Singapore and improve the well-being of Singaporeans.

3. At this juncture, we do not think it is necessary to extend tax deduction to charities working abroad and revise the 80:20 rule. We will review our policy as the charitable sector develops and the needs of Singaporeans are met.