The private sector representatives in Nepal have questioned the ability of the government to properly mobilise the funds for the corporate social responsibility (CSR) initiatives that will be generated from domestic industries out of their profit as required by the new Industrial Enterprise Act.
In this regard, they appealed the government to introduce effective guidelines which would ensure that such funds collected from industrial sector are utilised for the said purpose.
The new Industrial Enterprise Act has introduced a provision whereby all small, cottage, medium and large industries making annual business transaction of above Rs 150 million should spend at least one per cent of their annual profit in CSR activities. In a bid to channelise all CSR-related funds of industries through a single window, MoI had announced that a Children Welfare Fund (CWF) would be set up and had urged domestic firms to contribute the allocated one per cent for CSR to the Fund.
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However, industrialists have said that though the CSR provision in Industrial Enterprise Act and formation of Children Welfare Fund is a good MoI initiative, the government should assure that money collected in the Fund is utilised properly.
“We are already paying multiple taxes to different government agencies under various headings, but these taxes are not spent well,” Ravi KC, vice-president of Surya Nepal said, adding that the government should first properly invest taxes that it collects from domestic firms.
KC also suggested the government to let industries themselves invest in CSR activities as per their identified priority areas. “It might be better if the government ensures the effectiveness of CSR activities of firms by regularly monitoring such activities and suggesting the areas where such initiatives might be necessary,” opined KC.
Padma Jyoti, chairman of Jyoti Group, said that the government should introduce a provision to collect CSR fund from domestic industries based on their type. “Industries that are comparatively more harmful to the environment should be made to contribute higher amount for CSR activities,” said Jyoti.
Meanwhile, Umesh Lal Shrestha, vice-president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), said that MoI should introduce tax rebate facility for the funds that private firms allocate to carry out CSR activities.
In response to the comments made by the private sector, Industry Minister Nabindra Raj Joshi said that MoI will soon prepare a working guideline to mobilise the Children Welfare Fund by incorporating the suggestions put forth by the private sector and pass it on the Cabinet.
This article was taken from here.