Nepal ranked one of the worst countries for philanthropic freedom

Hudson20 June 2015 8:35 PM AEST: Nepal has been ranked among the world’s worst countries in terms of philanthropic freedom.

According to The Index of Philanthropic Freedom 2015 by the Centre for Global Prosperity of the Hudson Institute, the South Asian republic is the third worst country in the world when it comes to conducive philanthropic environment.

The report which was made public on June 15 indicates civil society organisations (CSOs) in the Himalayan nation struggle with bureaucratic red tape. “Nepal has a poor environment for both philanthropy and civil society,” the Washington-based think-tank said.

The Institute produced the report following an in-depth analysis of the philanthropic freedom in 64 different nations across the world. Nepal ranks 62nd just ahead of countries like Qatar and Saudi Arabia.

Two other South Asian nations, India and Pakistan, rank 46th and 44th respectively.

In the forward to the report, Hudson Institute said experts from within each country conducted a detailed analysis of the legal and regulatory barriers and incentives necessary for philanthropy.

It points out that although the interim constitution theoretically provides Nepalese citizens the right to peaceably assemble and associate, groups are nonetheless prohibited from acting without registration under the Association Registration Act.

Civil Society Organisations in Nepal
File Photo. Courtesy: The Carter Centre

A ban on foreign founders, lack of standardized reporting requirements, understaffed regulators, and unattractive tax incentives are other impediments for Nepalese philanthropists, the report observed.

Independent experts (including one from Nepal) who contributed to the report scored three main indicators: “1) ease of registering and operating civil society organizations; 2) tax policies for deductions, credits, and exemptions; and, 3) ease of sending and receiving cash and in-kind goods across borders.”

The Netherlands occupies the first position followed by the United States.

“The Netherlands stands out for the liberties extended by the government to CSOs: They are free from minimum capital requirements, can register in a single day, allow foreigners or minors to serve as founders, and are generally free from reporting requirements except when they provide public services paid for by the state.”

“As a result, CSOs in the Netherlands are almost uniquely free of governmental control and involvement. These liberties are further complemented by the country’s tax regime, which includes deduction ceilings for individuals at 10% and corporations at 50%, along with exemptions from corporate income taxes, energy taxes, and gift taxes. Unusually, the Netherlands also provides a similar range of tax benefits for organizations that give to foreign entities.”

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