Churches keen on tax-evasion probe
• But Rhema says one size fits all is not the answer
Religious organisations have welcomed the decision by the South African Revenue Service to investigate churches for possible tax noncompliance.
Religious organisations have welcomed the decision by the South African Revenue Service (SARS) to investigate churches for possible tax noncompliance.
A 2017 report on the commercialisation of churches in SA by the Commission for the Promotion and Protection of the Rights of Cultural‚ Religious and Linguistic Communities said that religion was big business in the country.
It recommended that SARS, in partnership with the commission, conduct a thorough investigation into tax evasion by religious leaders.
The commission also recommended that religious leaders and organisations should be registered and pay tax.
Bishop Malusi Mpumlwana, general secretary of the South African Council of Churches (SACC), said bona fide church activities would have no issues with normal application of standard laws.
“The churches are not above the law and all churches must abide by it … the SACC has previously said existing laws made to work effectively are adequate to deal with any wrongdoing conducted in any church.
“Like everyone else, we have been aware of the many unfortunate excesses in the practices of some pastors.
“We are, however, not able to make a comment at this time, while the broad membership of SACC churches are still in consultation on the wide range of important issues arising from the report of the [commission on] the commercialisation of religion,” he said.
SACC churches would soon hold a follow-up meeting with the commission and Parliament’s co-operative governance and traditional affairs portfolio committee for a full engagement on the report, said Mpumlwana.
Rhema Bible Church CEO Giet Khoza said that while the church welcomed the moves by SARS, “we would like to caution that not one size fits all”.
“They cannot go for everybody. It is not everybody who doesn’t comply.”
Khoza said the best approach would be for SARS to meet and consult with different religious leaders.
“Out of those consultations, [SARS] will be able to get a clear picture of what is going on in the sector. We also want to say SARS has an obligation in terms of making people aware of what is right and what is wrong.
“There are genuine churches which really do not know what to do [in terms of tax].
“We would advise SARS to consult with senior religious leaders, then have a campaign to make people aware, then after that, investigate those who are not complying,” said Khoza.
Religious institutions could apply to the tax authority to be exempted from income tax and other taxes under the Income Tax Act, according to SARS.
Once tax exemption status was granted, there were a number of specific criteria that had to be met.
These included but were not limited to conducting activities in a nonprofit manner with an altruistic or philanthropic intent.
SARS is also concerned that proper taxes on trading activities that are unrelated to religious activities as well as Pay As You Earn on remuneration and other benefits are not being paid in terms of legislation.
“Over and above, SARS has further found a number of religious institutions issuing taxdeductible receipts in terms of section 18A of the Income Tax Act … for donations towards religious activities.
“This is not permitted in terms of the Income Tax Act .... These entities are encouraged to use the SARS Voluntary Disclosure Programme to regulate their taxes,” SARS said.
THE CHURCHES HAVE NOT BEEN ABOVE THE LAW AND ALL CHURCHES MUST ABIDE BY IT