Avoiding Taxes In The Name of God
The purpose of this article is to provoke discussion on the taboo subject that churches and religious institutions must pay taxes to contribute their quotas to the development of the nation.
A tenet of all religions is the need to protect, love and care for one another particularly the poor and widowed in the community. This tenet is natural to all religions and does not require one to be Christian, Moslem, Buddhist, Jew, Hindu etc to know and abide by it. In James 1:27 the bible states “This is pure and undefiled religion in the sight of our God and Father, to visit the orphans and widows in their distress, and to keep oneself unstained by the world”. Unfortunately what do we see in Ghana today? Instead of giving to the poor and widowed, many religious leaders and institutions have taken to exploiting (robbing) the poor of the little money or wealth they have to enrich themselves.
We tend to shy away from discussions that involve some deeds and misdeeds of religious institutions and their leaders. Primarily because we fear being labeled evil, satanic, unbeliever, etc. I do run the risk of being labeled but nevertheless I will keep typing away as I believe I owe it a service to mother Ghana and God to get the discussion started. Now, why do I think churches should be made to be financially accountable to the country and pay taxes?
We all frown when it comes to paying taxes because we feel the immediate negative impact on our pockets. Why do we need to pay taxes at all? Taxes are used by governments to settle bills incurred in running nations. The Government of Ghana uses our tax money to provide and repair roads, provide social services, pay workers on government payroll, provide infrastructure, provide security etc. In other words our taxes are used for public good. Why then are some institutions exempt from paying taxes?
Companies and institutions are generally exempted from paying taxes when their activities inure to the good of the general public – essentially same uses to which our tax money are put. Sometimes exemptions are given to stimulate certain behaviors from beneficiaries. For instance tax holidays are given to Free Zone companies to encourage investment. In Ghana, as a general rule, churches, charitable organizations and educational institutions of public character are exempt from paying taxes.
The Roman Catholic, Presbyterian, Methodist and Anglican churches of old unquestionably demonstrated their charitable nature through the provision of schools, hospitals, portable water, and support for the poor and widows as well as many other selfless acts. These churches absolutely deserved the tax exempt status they enjoyed.
The church today is nothing like that church of the fifties, sixties, seventies or even the 1980s. The church of 2012 is more of a profit making business than a charitable organization. Today's church specializes in receiving money and material things than giving and doing anything 'charitable'. One wonders if leaders of some of these churches really read the bible.
In a lot of ways, religious organizations are run like businesses – for profit. Just as businesses, churches try to attract as many customers as possible to their products (prayers, counseling, healing etc) by advertising in news papers, on radio and TV. A cursory look at some of their billboards summarizes what they are about –photos of their leaders dominate the billboards with their names boldly written under, many times if the name of God or Christ appears at all on the billboards one will need a magnifying glass to see it. Churches spend a lot of money on recruiting “customers” to attend their seminars, events, trips, programs, and social gatherings. Many “New Generation” churches and some of the 'neo-orthodox' churches charge their members/clients/customers before they attend these seminars, events, trips, programs, and social gatherings. Many churches that charge for events make very juicy profits from those events. How different is a church that engages in organizing events from an event organizing company such as Charter House or Empire Entertainment? How different is a church that makes CDs of their events and sermons for sale from Sarkodie who sells CDs of his songs? Why then should Charter House, Empire Entertainment and Sarkodie pay their fair share of taxes while the churches hide behind the name of God and avoid taxes?
In addition to the events these churches organize, they sell physical products such as CDs (of sermons, hymns and programs), books, holy water, holy oil etc. All these products are sold with profit margins tagged on. In some churches, members and customers are made to pay consultation fee (GH₵ 400 or more)before they are able to meet with the pastors, prophets and leaders, followers are also made to pay for prayers; with a GH₵ 50 prayer different from a GH₵ 100 prayer or a GH₵ 500 prayer. I wonder how much consultation fee Jesus Christ would have charged if He was with us in the flesh today.
Without getting into doctrinal arguments, some churches have turned themselves into tax collection agencies where members are coerced into paying 10% of their earnings to the Church/God; a tax originally meant for the Levites (the governing family in the Old Testament times)- Deuteronomy 14:28-29. In some of these churches, names of “defaulters” are published by the churches to force them to pay. Ironically many of these churches have members languishing in poverty; members who are unable to pay the school fees of their children yet religiously pay 10% of their earnings to the church. Many religious leaders, particularly Christian leaders have lost their focus. The ostentatious and opulent lifestyles of these men and women of God live much to be desired.
Society and big companies have exploited the poor for far too long and now the people expected to give refuge and comfort to the poor have joined in the exploitation. According to Jeremiah 5:28, "(They) have grown fat and sleek. Their evil deeds have no limit; they do not plead the case of the fatherless to win it, they do not defend the rights of the poor”. It looks like Jeremiah was speaking directly to some Christian leaders in this country. My question is who is looking out for the poor? Who is protecting the poor? What happened to the tenets of Christianity? The idea of paying tithe to churches and preachers has become a weapon that some religious leaders are using to exploit and oppress their followers in the name of God. Preachers threaten their poor followers of hell and of brimstone and fire if they did not contribute 10% of everything they receive, take note, not everything they earn. This situation has led to the poor followers donating 10% of money meant for rent, school fees, feeding, etc to churches and religious leaders. Old ladies who receive upkeep money from their children abroad are also made to pay tithes.
The church has become a profit making business and must be made to contribute to the development of mother Ghana through paying of taxes. In addition to being a business, interestingly churches benefit a lot from government's use of tax revenues. Churches frequently use the services of the police, fire service, roads etc. and in some cases churches even block roads in order to execute their programs depriving taxpaying Ghanaians the use of the roads.
If Christians in Ghana believe that governments are put in place by God (Rom 13:1), then it is the duty of churches to support governments to bring development to the people. Jesus also endorsed the idea of paying taxes to civil governments in Matt 22:17-21 when he said “Therefore render to Caesar the things that are Caesar's, and to God the things that are God's”. Paul in his letter to the Christians in Rome wrote “For the same reason you also pay taxes, for the authorities are ministers of God, attending to this very thing. Pay to all what is owed to them: taxes to whom taxes are owed, revenue to whom revenue is owed, respect to whom respect is owed, honor to whom honor is owed”-Romans 13:6-7. In Matt 17:24-27 Jesus Himself paid taxes. It is an honorable duty for churches and other religious institutions to contribute towards the development of Ghana by willingly paying taxes as the Bible clearly endorses it.
Governments over the years have shied away from demanding accountability from religious bodies in Ghana. I wonder if there are any laws that demand religious organizations to register and file their income and expenditure statements with tax authorities. If there are such laws then they must be reviewed and enforced. Which ministry has oversight responsibility of religious institutions? Is it Ministry of Interior, Ministry of Culture and Chieftaincy Affairs? Your guess is a good as mine. In the USA and many other places, whereas churches and nonprofit organizations do not have a tax paying obligation, they have a tax filing obligation; failure of which can lead to the closure of these organizations. Those jurisdictions review the income and expenditure statements of tax exempt organizations to determine whether they should keep their exempt status or lose it. If organizations do not perform the activities for which they were set up, they are made to pay taxes.
In this age of economic terrorism and international money laundering churches and other tax exempt organizations are perfect vehicles for money laundering. If governments do not adequately regulate these organizations, they may be fighting a lost battle in the war against money laundering. In Ghana today, the number of churches will rival the number of businesses actively operating. There are churches and other religious institutions whose revenues can rival the revenues of certain blue chip companies.
The phenomenon where churches and other religious bodies are considered 'untouchable' should end! The phenomenon where anyone who asks that religious bodies be accountable to their members and the nation is unpleasantly labeled should end! Religious bodies should live up to their social, civic and religious responsibilities. If religious bodies and nonprofit organizations are required by law to file taxes and the law is strictly enforced, not only will people stop hiding behind religious bodies to run their own profit making businesses but also the entire nation will know which churches deserve tax exemption and which ones do not deserve it. Government should consider revising the tax codes to ensure that churches start contributing to national development through payment of taxes.
I will suggest that as a general rule any organization that does not use 51% or more of its revenue on charitable activities should not be exempt from paying taxes and its charitable status must be revoked. Also government should consider imposing a flat tax on the 10% tax (tithe) that some churches collect from their followers.
It is time for us to interrogate the propriety of Ghana's tax codes and how they are being implemented. For instance, why do we have tax exemption for 'free zone companies'? Are the tax exemptions serving the purposes for which they were instituted? Should we exempt local startup companies from paying taxes? What about basic private schools? How should we implement import duty exemptions? Don't be left out of this discussion.
By Prosper Kwesi Acquah
Business & Financial Analyst,
Member of Volta Advocacy Forum