Inland Revenue Department-approved tax deductions under salaries tax for charitable donations rose from $1.66 billion in 1997-98 to $2.35 billion in 2002-03, an increase of more than 40%.

Secretary for Financial Services & the Treasury Frederick Ma says the figures prove that Hong Kong people are compassionate and generous.

In his latest FSTB & You column, posted on the Financial Services & the Treasury Bureau's website, Mr Ma said the Government raised the tax deduction ceiling for charitable donations from 10% to 25% of assessable income or profits in 2003-04 to encourage more private donations to the needy.

The number of approved tax-exempted charitable bodies has also risen, from 3,060 in 1999 to 3,981 in March 2004. Mr Ma said the Inland Revenue Department processes each tax exemption application with extreme care to protect revenue.