A Liberal Democratic Party committee on Wednesday drew up a proposal to grant tax breaks to firms or individuals that donate to nonprofit organizations, committee officials said.
Under the proposal, firms could treat as company expenses NPO donations of up to 2.5 percent of their revenues, while individuals could deduct up to 12.5 percent of their incomes as donations.
The committee is hoping to incorporate the plan in a package of fiscal 2001 tax revisions slated to be prepared at the end of this year by the LDP's tax commission. The object is to reinforce the financial bases of NPOs, according to the officials.
As part of the proposal, the committee will also call for reducing NPO corporate tax rates to 22 percent and an exclusion from fixed-asset taxation for NPOs that operate libraries and museums.
The panel also said the National Tax Administration should be tasked with determining which groups are eligible for tax cuts after establishing suitable criteria, including NPO performance and disclosure of information about finances and charitable activities.