FINANCE NEWS: Tax relief on drug donations meets with controversy

The Budget introduced controversial tax reliefs to encourage pharmaceutical companies to donate drugs to developing countries.

Companies will be able to deduct the cost of donations for humanitarian purposes from their taxable profits. The measure was introduced retroactively from 1 April.

Campaigning charity War on Want expressed concern that the tax reliefs were introduced without consultation. The charity recently published a report highlighting how US drug companies took advantage of similar tax breaks to dump unsaleable or out-of-date drugs on the Third World.

Campaigns officer Nick Dearden said: "None of the key NGOs have been consulted about this policy, despite evidence that such a policy in the US had been a disaster for the developing world."

The Government has said it will encourage drug companies to adhere to World Health Organisation voluntary guidelines, but War on Want is pushing for a public register of donations.

"We need a transparent register so that taxpayers can see whether these donations are doing good or are just causing additional problems,

said Dearden.

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