The Ministry of the Interior’s (MOI) draft bill to regulate social associations will enhance financial transparency efforts by requiring these groups with a specified income threshold to release their budgets and financing information to the public, a ministry official said.
The move comes amid renewed efforts to examine the finances of the Red Cross Society of the Republic of China, the Public Service Association, the Friends of Armed Forces Association and other groups with long ties to the Chinese Nationalist Party (KMT) or former KMT administrations as part of the investigations into the party’s stolen assets.
In response to criticism that the Civil Associations Act (人民團體法) infringes on the right of free association, the government plans to replace the act with three new laws — one each to cover political parties, occupational associations and social associations.
The ministry has completed an initial draft of the social associations bill, which is to eliminate restrictions on the right to establish such groups while enhancing regulations on their financial oversight, ministry official said, adding that financial accountability is to be accomplished by transparency and not administrative intervention.
The draft bill would require civic associations with incomes equal to or greater than NT$15 million (US$487,393) to make their financial records available to the government and the public, Social Associations Preparatory Office Deputy Director Chen Chih-chang (陳志章) said.
The ministry wants to prevent the exploitation of the tax code and abuse of public donations by requiring these associations to make annual, notarized disclosures of certain financial records, including subsidies and donations, as well as a list of planned and performed work, with the exception of legally privileged information, such as private data, Chen said.
The disclosure is to be published in formats open to public access, including the Internet, and a publicly available online copy would be required, he said.
Under the Civil Associations Act, such associations receive preferential tax rates and can accept public donations without an obligation to publicly disclose their finances, Chen said.
While these groups are required to submit an annual record of their finances and assets to the government, governmental agencies do not have the authority to compel them to do so, he added.
According the draft bill, a governmental agency would be authorized to audit the operations of social associations, which would not be able to refuse or obstruct the audit without due cause and a fine of between NT$10,000 and NT$50,000 may be imposed on groups that fail to comply with the requirements after a mandated period of time.
The fine may imposed multiple times, if necessary, according to the draft bill.
However, the proposed bill would not address the relationship of social associations to political parties, as that issue would remain under the purview of the Act Governing the Handling of Ill-gotten Properties by Political Parties and Their Affiliate Organizations (政黨及其附隨組織不當取得財產處理條例), Chen said.