There has never been a time ripe for government to impose religious tax than it is today. The Christian society have been at the fore front against any motive by government to tax any income accruing to the church or other religious bodies other than from their business or investment activities. Among the most notable arguments against such tax are;
- The religious bodies are at the forefront of provision of public good like building hospitals, schools, prisons, shelter for homeless and other major infrastructure that complement government capital expenditure.
- They are registered as Non- Governmental Organization hence they are shielded by the law from payment of income tax.
- Any form of tax will be an indirect way for government to control the church. This means government through Ghana Revenue Authority (GRA) can closed down defaulting churches who don’t honour their tax obligation.
- The religious organizations perform key roles of meeting the spiritual needs of the citizens which the government in itself is ill-equipped to provide.
- Taxing religion shall place the state above religion which is not supposed to be because religion exists before any human form of government.
As much as these salient points are legitimate in opposing any form of income tax on religion, it must also be noted that no government exists against the general welfare of its citizens. During the life of the Lord Jesus Christ on earth, the Bible states that He paid tax to the Roman empire (Matthew 17:27).
Most people argue, this tax Jesus paid was not a religious tax and there has never been a form of tax in ancient times levied against the religious institution until recently in some countries in Europe. The taxing of religion in the West according to some experts have led to the abandonment of lots of place of worship thereby contributing to the falling moral standards.
On the other side, religion has become a profiteering venture for most religious leaders due to the relax regulations, exemption from income tax, among others. Though the Income Tax Act, 2015 (Act 896) as amended does not exempt income earned by individuals other than as stipulated in section 7, these religious people hardly declare their income to GRA and pay the tax thereof.
However, they do exhibit opulence lifestyle that go contrary to their core mandate. Others use it as an avenue for money laundering to the detriment of the state. As a result, there have been recent upspring of religious activities since the country does not have any law or enactment to restrict the fundamental human rights of freedom of worship as enshrined in the 1992 constitution.
A recent research conducted by Beni et al (2021) in the Ejisu Municipality established that majority of people sampled want the tax exemption status of religious organizations to remain, a nationwide sample I believe will disagree to this assertion.
One cardinal principle of taxation is not only to raise revenue for national development but also to curb certain lifestyle and consumption of particular goods or services. It’s in this backdropped that the religious tax must be enacted to regulate the activities of religion as well as generate revenue for national development.
In this article, I proposed how religious taxation should be adopted in the view of not destroying religion or not as a way of government interfering with freedom of religion as enshrined in the constitution.
- All entities established for the purpose of promoting a religion must be liable to pay income tax on the gains made during the year of assessment or part of the year.
- The tax rate should be at a reduced rate of 10% symbolizing the tithing mandate of religion.
- However, if the entity uses the gains made during the year or part of the year for capital expenditure, such entity shall be exempt from the tax.
- The capital expenditure must be defined as that which benefit serves the public good.
- GRA must collect and account for this tax in accordance with Act 896 and Act 915.
In conclusion, religious tax is not an avenue to destroy the moral standards of the society. It is to harness the share-burden of the citizens for national growth and development. These tax may also be channeled to assist the Christian Council, the Catholic Bishops Conference, Muslim unions and other minority religious groups in their operations including sponsoring the building of cathedrals, mosques etc.
>>>The writer has MSc (Economic Policy), CITG
Reference
- Beni, A., Banoeng-Yakubo, J. and Oduro Amankwaah, B. (2021). Philosophy of Taxation and Tax Exemptions of Churches in the Ejisu Municipality of Ghana. International Journal of Innovative Research & Development. ISSN 2278-0211.
