Religious bodies may have to pay tax

2018-02-08 13:27

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A proposal that could see religious organisations paying income tax has been met with a mixed reception by their umbrella bodies.

The Commission for the Promotion and Protection of the Rights of Cultural, Religious and Linguistic Communities (CRL) recently recommended to the portfolio committee on Co-operative Governance and Traditional Affairs that religious organisations be made to pay income tax.

This would be done through amending the Non-Profit Organisations Act 71 of 1997, which currently exempts religious organisations from paying tax.

On the back of this recommendation, the South African Revenue Service last week said it would engage with religious institutions about paying tax.

The taxman, in a statement, cited the recommendation by the CRL in its decision.

While religious bodies welcomed good corporate governance and administration being expected of institutions, some expressed concern over what it could mean for more modest places of faith.

Chairperson of the South African Muslim Network (Samnet), Dr Faisal Suliman, welcomed the law in principle, but said it should make exceptions for some religious organisations. “There is a lot of financial pressure on religious institutions, especially those that don’t own property and have to rely on donations. In those cases, the government has to consider their plight.”

He added: “They [the government] needs to consider that these organisations take those funds and go on to do social welfare work which alleviates the burden on the government.”

He said religious institutions which own large properties and income-producing assets should be liable for tax, however.

“The law needs to be framed properly and have some [concession] for some of the religious institutions.”

President of the South African Hindu Maha Sabha, Ashwin Trikamjee, echoed Suliman. “In principle, all religious institutions should be exempt from all taxes. However, those that are involved in commercial activity regarding the way they are funded, they should comply with tax laws.”

He said: “But our [Hindu] institutions are all effectively funded by donations. There are no assets, no large staff bodies.”

Trikamjee, who said the Maha Sabha was currently on a roadshow to teach temple owners about compliance with corporate governance, welcomed the idea of religious institutions practising ethical administration.

Michael Swain, the executive director of Freedom of Religion South Africa (For SA), said religious institutions should abide by tax laws.

“Our position has always been that freedom of religion cannot be used as an excuse or reason to disobey or evade the law of the land, including the tax laws.”

He said the change to the law could highlight financial abuses that occur in the religious sector.

Read more on:    pietermaritzburg  |  religion

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