Loving Source Information Center Tax Inquiry

Things don’t look good in the current tax inspection on AIDS support group Beijing Loving Source Information Center (北京爱源信息咨询中心), an AIDS support group, writes Zeng Jinyan, in a blogpost of November 26.  Ms Zeng managed the group and closed its operations down earlier this month.

In the inquiry, Ms Zeng listed six major contributors to Loving Source’s work for children and families affected by AIDS: the Chinese AIDS Foundation (中华艾滋基金会),the World Children Fund (全球儿童基金会), UNICEF (through the Chinese Association of Sexually-Transmitted Diseases and AIDS), ITPC (联合基金), Oxfam, and the Tides Foundation, plus donations through the PPC Pen Pal Club (PPC笔友俱乐部). According to Ms Zeng, most of them were transit amounts which went  directly to children and families affected by AIDS, providing them with aid for costs of living, medical care, and education. The contributions fall into the categories of business taxes, income tax and several other categories. Ms Zeng writes that her organization provided information [to the tax office, apparently] that there is a system of transferring funds.

The laws restricting restablishment of NGOs were so tight they had no choice but to set up a private company, Time correspondent Simon Elegant quoted Teng Biao in July 2009. Once Teng Biao’s and Xu Zhiyong‘s Open Constitution NGO had been shut down by a huge fine, even CCP mouthpiece Global Times quoted a critic of the tax offices’ approach:

It’s not unusual for a corporation to have flaws in taxation,” said Lu Jun, chief coordinator of the Beijing Yirenping Center, a non-profit organization devoted to helping patients fight discrimination and protect their own rights.
“Considering it’s the first time the Open Constitution Initiative has been found to have such flaws, taxation officials could remind it and request it to pay the insufficient tax, rather than forcing it to the edge of bankruptcy by imposing a harsh fine of more than a million yuan.”

But then, that’s probably exactly why the law doesn’t provide NGO’s with a safe legal foundation – to have the option to knock them down at the authorities’ own discretion. The categories of tax that Beijing Loving Source Center may need to pay would suggest that this NGO, too, was established as a private company.

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Updates
Tweet: “taxes on 5yrs of charity”, Twitter, Nov. 26, 2010
Website for Activist’s Release, RFA, Nov. 26, 2010