Tax Churches – CDD Director Tells African Leaders

The Executive Director for the Centre for Democratic Development (CDD-Ghana), Professor Henry Kwasi Prempeh, has called on African leaders to adjust their internal revenue collection laws to tax churches.

Charitable churches and faith-based organisations often take freewill offerings, tithes and seed-sowing covenant offerings.

According to Prof. H. Kwasi Prempeh, churches must pay their taxes on the amount of money they accumulate from the church members.

In a Facebook post by Prof. H. Kwasi Prempeh on Wednesday, April 27, he said African governments must not exempt churches from income tax collection as those religious organisations make profits in what has become a business to most founders.

Excerpts of his post read, “Clearly, the African state’s longstanding “hands-off-the-Church” approach is proving to be socially disastrous and no longer sustainable. The State is, frankly speaking, abdicating its responsibility to its citizens by leaving them at the mercy of all manner of persons masquerading as men and women of God and preying on the existential, psychological, and spiritual vulnerabilities of the people. The existing State-Church relationship in Africa needs to change to reflect the vastly different and changing nature of the church landscape. ”

“The existing regulation-free relationship was forged during the colonial period when churches and missionaries combined missionary or evangelical work with charitable social work like building and operating schools (to propagate their religious beliefs, of course). Moreover, those early churches were properly organised corporate bodies, with clear structures and hierarchies. It is because they functioned primarily as charities, using their revenue to support their missionary and charitable projects, that those early churches were accorded presumptive tax-exempt status.”

“The current situation where there is zero entry barrier to the establishment or operation of a “church” is certainly not sustainable. Let’s begin by doing away with blanket tax-exemption for churches and, instead, subject churches to income tax (a tax on their net income), granting each church tax credits or exemptions only upon auditable proof that incomes have been used to support missionary or charitable work. Then, of course, we must use and enforce zoning and noise abatement ordinances, too, to ensure that “churches” do not locate anywhere or behave anyhow in the communities and neighbourhoods where they are located. One would have expected the “industry” itself to implement and enforce some form of self-regulation or code of conduct among its membership. Unfortunately, with each sole proprietor believing they are God’s chosen one, self-regulation appears unlikely”.

Section 94 of Act 592 of the 1992 constitution of Ghana under the Internal Revenue Law exempts faith-based organisations from paying tax.

Likewise, churches in other African countries are not allowed to pay taxes because such organisations are not considered business firms.