Charity gets overseas no-tax status

Tantri Yuliandini, The Jakarta Post/Jakarta

Contributions to local charitable organization The Sampoerna Foundation will now be tax deductible for United States and Canadian companies and nationals, the foundation's spokesman Hendri B. Satrio said on Friday.

"Unfortunately, because of the current local tax legislation, such deductions are not available to Indonesia-based donors," he told The Jakarta Post.

Hendri explained that tax-deductible status had been made possible as the Sampoerna Foundation was recently made a partner by the U.S.-based Give2Asia, an organization established by the Asia Foundation, and recognized by the United States and Canadian governments.

"(So now) these overseas private and corporate donors will now be able to obtain tax deductions from their own governments when they contribute some of their earnings or profits to charitable activities in Indonesia," he said.

As of March 2005, the Sampoerna Foundation had provided scholarships to 12,110 senior high school students, 1,000 junior high school students, 97 undergraduate students, 93 master's degree students and 10 MBA students studying abroad from across Indonesia.

Besides the scholarship program, other programs supported by the foundation include education programs for Aceh and North Sumatra, and teacher and school quality improvements.

Both the United States and Canada make both corporate and private charitable donations tax deductible provide the charity in question is registered as such.

Sampoerna Foundation chief operating officer Elan Merdy said that he hoped that with this latest development, funds from international donors would flow in to assist the Foundation's education programs.

As things stand, charitable donations are not tax deductible in Indonesia, but it is hoped that proposed amendments to the tax legislation currently under deliberation will permit such deductions.

"If the Indonesian government wants to see immediate contributions from the private sector for community services in Indonesia, a tax deduction policy should be considered," Elan said.