The Government must adopt the regulations concerning the implementation of the law that will allow redirecting 2% of the income tax to public and religious organizations as soon as possible so that this mechanism could be put into practice. For the 2% Law to be efficient, it must envision equal conditions for the beneficiaries, must eliminate competition between civil society and religious organizations and lay down equal rules for the two types of organizations as regards responsibility for misusing the money allocated this way. The proposals were presented by the authors of the policy document “Impact of the 2% Law on the financial sustainability of civil society organizations”, launched by the Legal Resources Center of Moldova, IPN reports.
The Center’s legal consultant Sorina Macrinici said the law stipulates unequal conditions for using the 2% of the income tax by the civil society organizations and religious institutions. The penalties for violating the rules of spending this money are different. The NGOs are fined and can lose the status of public utility for a period of three years, while the religious organizations can be only fined.
To be eligible, the SCOs must obtain the status of public utility that is provided for a period of three years. This can cause difficulties. Every three years, the organization will have to again go through all the procedures to get this status again. Experts consider these organizations should only prove the activity of public utility, in accordance with the Law on Public Associations, to become eligible. The Fiscal Code provides three options for directing the 2%, which can cause confusion in the monitoring process. The policy document recommends establishing one method of transferring this money as well as empowering the fiscal bodies to calculate and transfer the 2% as it is hard for the taxpayers to calculate themselves the exact sum that is to be directed.
Legal Resources Center legal assistant Ilie Chirtoaca said some of the conditions regarding the use of the money allocated from the 2% are difficult and can diminish the efficiency of the law. During the first years of implementation of the law, the sums allocated this way will be very small and the 5% cap on the sum that can be used for administrative purposes should be raised to 50%, as in Hungary, and can be afterward reduced. The beneficiary organizations will also need money for publicity so as to promote this mechanism and convince the population to transfer those 2%. Some 10% of the money obtained this way should be used on publicity.
The representatives of the authorities attending the event said the regulations concerning the implementation of the 2% Law are being formulated, but didn’t provide details about the stage at which this document is and when it will be submitted to the Government for approval.
The policy document “Impact of the 2% Law on the financial sustainability of civil society organizations” was worked out by the Legal Resources Center of Moldova in partnership with the European Center for Not-for-profit Law within the Moldova Partnerships for Sustainable Civil Society that is implemented by FHI 360 with financial support from USAID.
