THE CONFLICT PERSPECTIVE BETWEEN SOCIAL ENTERPRISE’S DUAL GOAL AND TAX POLICY IN ENSURING SUSTAINABILITY

Abstract

The potential influence of the growing number of social enterprises (SE) will encourage to address economic, social, and environmental concerns that may contribute to the nation's socio-economy. However, there are still many obstacles and uncertainties in their path to sustainability. The current study aims to discuss the conflict perspective between SE’s goals and the eligibility criteria for tax incentives in ensuring SE’s sustainability. SE characterized as hybrid organization that have clear mission to create positive social or environmental impact with income generating from selling products or services. Nevertheless, current tax system is unable to accommodate both business and this situation become a constrain to SE’s sustainability. Consequently, research on the sustainability performance of social enterprises by looking at tax perspective is necessary to help them to continue delivering socially and environmentally-beneficial activities with financially sustainable situation. This paper adopted library research approach which consisted of numerous publications. The reviewing process begins from April 2022 until June 2022. In 2020, only a small number of SE has been accredited as legitimate SEs that is only 37 SE.A and 11 SE.A Plus. This is due to strict criterion involved in the accreditation process particularly on allocation and profit criteria. The accreditation status is important for SEs to access great support and opportunities from the government. Besides, limited privilege exists in terms of tax exemption and tax deductions incentives on SE which will affect the sustainability of SEs. The findings of this study contribute to the body of knowledge by providing valuable inputs to supplement government strategies in establishing guidelines for best practises to support the growth and sustainability of social enterprise sector in Malaysia.