Bosses who want to support their workers in giving back to society will get an extra nudge to do so.
Businesses that organise their employees to volunteer and provide services to registered charities will soon get a 250 per cent tax deduction on associated costs incurred. This is subject to the receiving Institution of Public Character's (IPC) agreement.
This deduction will be subject to a yearly cap of $250,000 per business and $50,000 per IPC.
The pilot Business and IPC Partnership Scheme will run from July 1 this year until the end of 2018.
"Businesses are well placed to run impactful programmes," Finance Minister Heng Swee Keat said, in announcing measures to help build a more caring society.
"We should give a boost to corporate social responsibility (CSR) and make it easier for employees to contribute through their workplaces."
Tax deductions for firms that get employees
Companies now get a 250 per cent tax deduction for donations of cash, and qualifying in-kind donations, such as land and computers, to certain IPCs. This has seen cash donations rise each year.
The head of group corporate communications at OCBC Bank, Ms Koh Ching Ching, welcomed news of the corporate tax rebate, which "effectively means that companies will be able to use the savings to offer even more support to society".
"This is especially important during the current economic climate when donations to charity are less forthcoming," she said. "The needs of the underprivileged do not dip as a result of an economic downturn."
Last year, more than 2,100 OCBC employees spent close to 12,000 hours volunteering at more than 100 activities organised to support different segments of the community, including needy children, the elderly, and youth at risk.
"In the course of volunteering, we help pay for transport, meals, cleaning supplies, food, teaching materials and household supplies for our beneficiaries.
"We can definitely use the savings we derive from our volunteer-associated tax rebates to offer more support," Ms Koh said.
To further boost donations to the Community Chest, which raises funds for some 80 voluntary welfare organisations, Mr Heng said the Government will match, dollar for dollar, additional donations through the monthly donation SHARE programme.
This will be done for three years starting from next month.
Royal Plaza on Scotts general manager Patrick Fiat, who signed up for SHARE in 2002, was glad to hear of the Government's dollar-for-dollar matching.
The hotel already matches its staff's donations dollar for dollar, which totals about $2,300 a month.
Mr Fiat believes the Government's matching will encourage further participation and more donations.
Businesses that encourage staff to donate regularly will be allowed to use part of the matching funds to organise CSR activities.
Social and Family Development Minister Tan Chuan-Jin will elaborate on this during the debate on his ministry's budget next month.
ComChest managing director Ng Ling Ling said the Government's matching grant for its SHARE programme will help more businesses encourage their staff to donate in a sustained manner.
"It will also boost more volunteering opportunities as part of their corporate social responsibility efforts," she added.