Sun, Aug 27, 2006 - Page 8 News List

Clarifying the status of donations

By Jan Shou-jung 詹守忠

The Ministry of the Interior says the campaign to oust President Chen Shui-bian (陳水扁) and the fundraising associated with it -- both initiated by former Democratic Progressive Party chairman Shih Ming-teh (施明德) -- violate the Political Donations Law (政治獻金法).

The ministry has called on the Control Yuan to initiate legal action.

The ministry is responsible for implementing this law, but the Control Yuan is the overseer of all administrative agencies and does not accept instructions from a ministry.

The passing of responsibility back and forth between the ministry and the Control Yuan detracts from the state's authority and the image of the government, while a lack of legislation regulating such fundraising hampers the judiciary.

At issue is the credibility of the Political Donations Law and the statute governing fundraising for nonprofit purposes (公益勸募條例).

Shih's activities are not covered by this statute.

According to the Political Donations Law, a political donation is liquid assets or real estate that shall not be reimbursed, payments made without expectations of equal return, exemption of debt, or other economic benefits given to any individual or group competing in an election or participating in other related political activities.

While Shih's campaign to unseat Chen is political in the wider sense -- though some argue otherwise -- it has nothing to do with the electoral process.

If Shih's fundraising doesn't fall under the Political Donations Law, does that mean that it isn't covered by any law?

No: Since a political donation is a particular form of monetary gift, it should fall under the Estate and Gift Tax Act (遺產及贈與稅法). The tax is levied on the party that presents the gift, and NT$1 million (US$30,400) per year is tax-exempt.

With each person only giving NT$100 to Shih's campaign, the tax does not apply. This means that if the Cabinet wants to act against Shih's fundraising, it should ask the tax authorities to study the bank accounts Shih is using.

Unless Shih's alliance wants its donors to be fined or to be asked by tax authorities to pay supplementary taxes, it should describe the gift tax in its promotional literature, and declare that the funds are gifts, not political donations.

Jan Shou-jung is a legislative assistant.

Translated by Perry Svensson

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