TUSEV convened NGO and state officials to discuss improving the regulatory treatment of public benefit organizations in Turkey On July 14 2005 TUSEV convened NGO and state officials to discuss improving the regulatory treatment of public benefit organizations in Turkey. This was the first time such a meeting was convened on this topic, with participation from both government and civil society. 25 participants included NGO leaders from umbrella organizations, human rights associations, and NGOs focusing on micro-credit, education, women’s issues and poverty eradication, and key state officials from the Ministry of Interior, Ministry of Finance and Foundations Directorate. The interactive roundtable workshop was led by David Moore from the International Center for Not for Profit Law (ICNL), and facilitated by the team at TUSEV. Throughout the day participants reviewed existing legislation and procedures and discussed the core principles and best practices regarding public benefit and taxation. In conclusion all participants agreed on the following outcomes: The qualifying criteria for what organizations are considered “public benefit” should be clear, objective and defined similarly for associations and foundations. The current practice dictates significant differences between the 2 types of organizations- for foundations, the concept is too limiting, and for associations it is too broad and therefore allows for too much discretion by decision makers. It was agreed that the qualifying activities should be defined clearly enough so that discretion by decision makers is limited, but flexibly enough to allow room for interpretation and change over time, depending on the needs of society. The designated governmental decision-making body should be objective, independent from political influence, and sufficiently expert in public benefit decisionmaking. In addition, NGO-applicants should benefit from procedural safeguards during the application process. Although the Council of Ministers is the final decision making authority in Turkey, it obtains recommendations from the Ministry of Finance as well as either the Department of Associations or the Foundations Directorate, depending on the applicant organization. It should be noted that the main complaint in this area was the length of time it takes to reach a decision, and the lack of transparency due to the number of agencies involved in the process. Procedure and conditions under which public benefit status can be obtained were discussed in great detail. The three main issues regarding this topic were government review (ensuring a certain time limit for responses to applications- which is currently not the case in Turkey), required documentation (ensuring that documentation is not cumbersome), and timing (discussing when an NGO should be eligible to apply). In addition, participants discussed what conditions and restrictions apply – or should apply - to public benefit organizations. Current procedures and conditions are inconsistent, not clearly defined by law or regulation, and sometimes susceptible to discretionary powers of authorities- which makes the application process more difficult and subjective. Tax benefits to NGOs and their donors were discussed at length. Although tax benefits are generally enabling, income from economic activity is always subject to full taxation. It was agreed that more enabling conditions for donations from individuals and companies (e.g. removing obstacles to payroll giving, increasing deductions for donations, etc.) were also necessary. In summary, the day-long discussions provided for a meaningful and substantive exchange on this important issue. This promising first step (which was a follow up to several studies and reports on this issue in previous years) holds much potential in moving forward with reforms that will encourage more viable conditions for NGOs engaging in public benefit activity, as well as promote and increased flow of donations to the sector from individuals and corporates. The detailed proceedings from this workshop will be available on www.tusev.org.tr and shared with all respective stakeholders as inputs for the policy process. For more information on this and similar initiatives please contact [email protected] or [email protected] . This event was made possible with the generous support of: United States Consulate Istanbul, Turkey charities aid foundation
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