Sukamdani said a CSR program should remain fully voluntarily as it is in most economies around the globe. If the government would turn the program into a mandatory program then it basically constitutes a new tax and this could be a too big burden on the companies that are still recovering from the economic slowdown. Moreover, the plan could hurt the investment climate of Indonesia by making investment in Southeast Asia's largest economy more expensive (thus undermining the nation's competitiveness). In fact, this would be in stark contrast to the central government's recent economic policy packages that aim at making 'doing business' in Indonesia less expensive by offering tax incentives and deregulation.

Globally, however, more and more companies are committed to their CSR programs amid the world's income inequality, social conflicts and environmental challenges. A CSR program shows that a company is committed to the "larger good" and thus it has a right to exist. Still, such programs tend to be a voluntary act. Only in India the CSR program was written into legislation (in April 2014), hence becoming mandatory, despite business leaders being split about the matter.

Currently, Indonesian companies are eligible for a tax deduction for expenses made under their CSR programs (including the schooling of their employees). The government offers this tax incentive in order to make it more attractive for companies to implement such programs.

Discuss