There are specific provisions for tax treatment of public benefit organizations and other organizations, specifically organizations working on relief of poverty, advancement of education, advancement of religion and the protection and care of the sick. In section 15 of the Second Schedule of the Income Tax Act, CSOs are exempt from income, property transfer, and withholding taxes. According to Income Tax Act Cap 323, ecclesiastical, public benefit organization and educational institutions of a public character are exempt from tax. “The income accruing to all ecclesiastical, public benefit organization and educational institutions receive privileged tax treatment. In November 2013, through the passage of Statutory Instrument 103, government lifted the tax exemption for Public Benefit and other Non-Governmental Organizations due to incidents of abuse of the law. However, in 2015 the government issued a statement that they were considering reinstating the tax exemptions and waiting for assurances that the legal instrument would not be abused. Despite this, the legal environment is conducive for the operations of foundations and grantees.
Photo credit: Lars Plougmann