A long-awaited draft law to improve China's charitable organizations and the industry was submitted to the nation's top legislative body for the first discussion on Friday.

The draft, studied by the Standing Committee of the National People's Congress at its bimonthly session, highlights the importance of the transparency of charitable organizations and clarifies what such an organization is and what responsibilities they should take.

As total annual donations have increased to 100 billion yuan ($15.73 billion) from less than 10 billion yuan in 2005, embezzled donations and other scandals have arisen in the industry, "which is why we are strongly calling for its regulation through legislation," said Tian He, a legal researcher at the Chinese Academy of Social Sciences' Institute of Law.

Tian said that the institute is pleased that "the draft responds to some hot issues about charity, and I believe it will encourage more donations, as well as put the industry in order".

Under the draft, a charitable organization that has been registered for more than two years can apply to the civil affairs authority it registered with for a certificate of public donation if it wants to distribute donations to the public, the draft said.

Information on charitable organizations, including a basic introduction to the charity and the process of their public donations, must be disclosed to ensure transparency, it said.

Every charitable organization would be required to submit an annual report to a civil affairs authority, and if the authority finds the organization has problems handling donated goods or properties, it would be allowed to check the organization's bank account.

In addition, donors would be eligible for tax breaks if their donations are used by charitable organizations, it added.

caoyin@chinadaily.com.cn