Monitor schools that are charities

PUBLISHED : Monday, 09 June, 2014, 3:25am
UPDATED : Monday, 09 June, 2014, 10:27am

The importance of a vibrant international education sector cannot be overstated. It attracts overseas talent and helps maintain the city's competitive edge and global outlook. Pressured by growing demand from the expatriate community for more school places, the government has taken the right step to offer more concessions to attract non-profit making international schools to operate in Hong Kong.

The Nord Anglia School in Lam Tin recently raised eyebrows after the South China Morning Post revealed that its parent group was listed on the New York Stock Exchange. With annual school fees up to HK$147,000 and a non-refundable fee of HK$84,000 for application and interview, the school is not for low-income households. It is scheduled to open in September. Whether the sponsoring body and the parent group have any financial links remains unclear. But it raises question about the school's status as a charity, which enjoys tax exemptions and pays a nominal fee for its premises.

Currently, there is no single law governing charities in Hong Kong. According to the Inland Revenue Department's tax guide for charitable institutions, organisations for the advancement of education may apply for tax exemption; but the funds must be used for the attainment of the stated objects. Distribution of incomes and properties among governing board members is banned; nor can they receive remuneration. However, there appears to be no specific rules governing parent groups. That gives rise to concerns over the school's compliance as a charity. The group said it was aware that it would be subject to yearly audits, and it might lose its premises if it failed to comply with tax exemption requirements. The Education Bureau also pledged to monitor the activities of the school sponsoring body to ensure compliance.

The public will be closely following the case. The 13 sites granted for international schools since 2006 are valuable public resources. The government should monitor the situation and ensure the concessions are enjoyed by the eligible.