Philanthropic assets can grow by half if Hong Kong relaxes taxation cap
Hong Kong’s relatively relaxed legal requirements for charitable organisations is one major draw to being the best city in the region to establish such structures
Hong Kong’s philanthropic assets can grow by about half if the city relaxes its tax deduction cap, which at 35 per cent is lower than the US and Singapore.
And if the tax incentives were put in place, Hong Kong’s assets could account for a higher percentage of its economy, to a level that matches or even exceeds that of the US, said Dr. Ruth Shapiro, founder and chief executive of Hong Kong-based Centre for Asian Philanthropy and Society.
That could translate to US$15.4 billion worth of assets, or 4.8 per cent of the city’s GDP, a percentage that the US holds based on the recent Global Philanthropy Report published by Harvard University and UBS. The country had the third highest percentage among 22 countries and territories surveyed.
Hong Kong’s US$10.6 billion worth of philanthropic assets from 2,000 institutions accounted for 3.3 per cent of its GDP, making it the highest percentage among Asian economies as the city is considered the best place to establish charitable structures in the region, according to the report. The city ranked fifth globally.
Even then, UBS Wealth Management’s head of philanthropy advisory for Asia-Pacific, Christina Tung said the asset value could be larger.
“The figure is seriously underestimated, as Hong Kong and other Asian people tend to be more private, and they don’t usually disclose how much assets they have in their foundations,” Tung said.