Credit: LUkraine asbl
Nicholas Zharov, President of LUkraine asbl, recently launched a petition aimed at supporting the non-profit sector in Luxembourg.
Public petition n°3251 calls on the Luxembourg government to "strengthen philanthropy" and introduce "more favourable measures to further encourage donations made by individuals and companies". The proposal is the introduction of a 100% tax credit for donations made by individuals and a 30% tax credit for companies, "while maintaining a ceiling of 20% of the taxable income of donations paid, with the possibility of carrying forward the excess donation over five years".
Speaking to Chronicle.lu, Nicolas Zharov shared that the petition was a "starting point" aimed at sparking a multilateral discussion on the topic rather than resulting immediately in direct application of a 100% tax credit. He said his organisation would welcome the discussion of other solutions. In France, for example, tax residents may deduct 66% of their donation from their income tax. Similarly, in Belgium, taxpayers can benefit from a tax reduction of 45% on donations.
Nicolas noted that the proposed solution has several objectives: mainly to promote philanthropy in Luxembourg by incentivising donations but also tackling inequality (e.g. for lower income donors) by applying the deduction directly to taxes that must be paid. The proposal is also linked to wealth distribution, offering people more choice when it comes to which organisations they trust and wish to support, and how tax money is being spent - he recalled that Luxembourg invests 1% of its GNI in development aid but it is the government who decides where that money goes. The proposed solution would thus contribute to "fair distribution controlled directly by the people", as well as a "more democratic, sustainable, open and transparent" society. Nicolas said he believed it would also create more competition in the sector. An additional benefit would be promoting Luxembourg as a more philanthropic country, he added.
Nicolas confirmed that LUkraine is planning a panel discussion next month to talk about transparency and to propose solutions. Referring to the Caritas embezzlement scandal, he noted that recent events had impacted all non-profits in terms of donors' trust. "When one big fish fails, all the other organisations feel the impact of this", he said, adding that it was thus important to gain back trust. "Starting an open dialogue in society is what will benefit everyone, the organisations as well as the citizens who are paying taxes."
Those wishing to sign the petition can do so here.
