UPP wants implementation of income tax amendment deferred

KUCHI NG: T he fe de ra l government must issue a clearer explanation of the amendment to the Income Tax Act 1967 which will affect the taxes on incomes of rel igious and charitable bodies.

United People’s Party ( UPP) secretary general George Lo, in making the call yesterday, said the impending implementation of the amendment in January was creating much apprehension and confusion among churches, temples, charitable trusts and foundations as its ramifications would severely af fect their incomes.

He said failure of the government to engage churches, temples and other religious and charitable bodies before drawing up the amendments sowed the seeds of confusion and worry among them now.

“While UPP does not wish to turn the passing of the amendment by both the Parliament and Senate into a blame game, it wish to point out the failure of our parliamentarians from both sides of the political divide and senators in speaking up for the people by passing the amendment without debate.

“This should be a wake-up call for all people’s elected representatives to be more vigilant in carrying out their duties.

“Now that the amendment has been passed, we have to deal with its consequence and get a clearer picture of what it entails,” Lo stressed.

He added the government should defer the implementation of the amendment and call for a dialogue on the amendment with representatives of religious and charitable bodies.

The amendment of Paragraph 13 (1) ( b) of Schedule 6 of the Income Tax Act 1967 spel ls out that incomes o f rel igious and charitable bodies that are not used for charity are subject to tax, he said. He pointed out this would mean that incomes of religious bodies used for religious purposes would be taxed.

“If that is the case it is most unfortunate that the government will be taxing the people for practising their faiths through taxing the religious organisations they belong to.”

He pointed out there should be clearer guidelines on what constitute ‘religious purposes’ as charity is an integral part of all religious organisations.

How would the expenditure of building, repair and maintenance of bui ldings of a rel igious organisation be classified as religious or charitable purposes since many of them are used for both, he asked.