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HIGHER TRANSPARENCY, FEWER SCANDALS

The reputation of Chinese charities took a hit in 2011 when a woman claiming to manage an organization under the Red Cross Society of China used social media to flaunt her wealth and extravagant lifestyle.

The public has been calling for more transparency and tighter internal management of charities ever since.

In response, the bill says charities must publish their articles of association and information on their executives and supervisory bodies. They should also give annual reports complete with financial statements, details of projects launched as well as staff pay and benefits.

It also stipulates that charities should minimize operational costs, keeping them below 15 percent of the amount they raise if they are certificated to get donations from the public.

Charities may have their registrations revoked if they engage in or sponsor activity deemed to undermine state security or public interests.

INDIVIDUAL RESPONSIBILITY FOR FUNDRAISING

A notable absence from the bill is the regulation of individuals appealing for aid.

In September, a man in east China's Anhui Province spread a story online claiming his girlfriend had been injured trying to save a girl from dogs and raised about 800,000 yuan. The story turned out to be a fraud and police later detained its author.

"The bill does not forbid citizens from asking for help online nor does it encourage it," said Kan Ke, former deputy director of the NPC Standing Committee's Commission of Legislative Affairs.

It will be up to individuals whether to make such appeals or donate to people who make such appeals, said Kan, who was involved in drafting the charity law.

"The legislature would prefer to see people turn to charities to do kind deeds, rather than going directly to a certain beneficiary, for it will be easier to supervise a small number of organizations than watch a huge number of individuals," he said. "We should let the professionals do the job."

TAX CUT FOR GOOD DEEDS

Addressing the common complaint that businesses making large donations don't get enough tax concessions, the bill stipulates that if a company's donation exceeds the legal limit of deductions from its taxable income in one year, the balance can be deducted from taxable income in the following two years.

Currently, the government waives corporate income tax on donations companies make from their profits, but the waivers only apply to the companies that donate 12 percent of their profits or less. The new bill eases this restriction, promising a rebate in the following two years.