Saturday, 11 July 2015

Churches divided on tax framework

The recent announcement by the Zimbabwe Revenue Authority (Zimra) that churches will be taxed as soon as November this year has caused discomfort among church leaders and their congregants.

While there is a clear division between churches and Zimra with regards to these plans, division has also emerged between different church groupings.

Some are calling for the taxation of pentecostal churches only, arguing that they have commercialised the gospel.

Last week, Vice-President Emmerson Mnangagwa also added his voice to the debate. He highlighted that churches should only be taxed when they decide to operate a business entity.

“If the church decides to go into the catering business, that business is supposed to pay its dues on tax. If there is a church gathering and the congregation gives a lot of money in offerings, there is no taxing involved. It is only when they decide to operate a business entity that taxation comes in.”
Vice-President Emmerson Mnangagwa
Addressing the Parliamentary Portfolio Committee on Small and Medium Enterprises and Cooperatives Development a fortnight ago, Zimra Commissioner General, Gershem Pasi said his office is working on a legislative framework that should be ready by November.

“We don’t care how they make their money, come November we will be through with our legislative proposals to the Minister (of Finance and Economic Development, Mr Patrick Chinamasa) which will tighten that area because we have seen loopholes there. They are not immune to taxation,” Comm-Gen Pasi said.

Some church leaders have since registered their displeasure with the Government initiative.

Evangelical Fellowship of Zimbabwe president, Dr Shingi Munyeza said churches as entities should not be taxed because there are exemptions that are clearly stated in the Taxation Act on such institutions. He however said if a church is running a business that business should pay tax.

“The church falls under welfare organisations which are not taxed. I do not agree that the church as an organisation must be taxed. I believe this would be a knee-jack reaction from the authorities due to a shrinking tax base caused by our current economic meltdown. This is a sign of an economy that has gone extremely informal hence shrinking the tax base. So the taxman will try and go for anything that appears formal,” added Dr Munyeza.

Founder and leader of Body of Christ Church, a local pentecostal ministry in Harare, Apostle Levi Mahemu shared the same sentiments.

Apostle Mahemu said churches should be exempted from paying tax. He said the healthy relationship that is currently prevailing between the church and the state should be maintained.

“I think the present situation should be maintained, churches must do its charitable work and deal with matters of faith while the Government should its duty like it has always been doing. My appeal to the authorities is that we deal with what is causing shrinkage in our tax base rather than taxing our welfare givers. Taxing the church as an entity will result in charitable and other welfare organisations being taxable,” added Apostle Mahemu.

However EFZ secretary general, Reverend Lindani Dube is of the view that fellow pastors and prophets are to blame on the whole taxation saga.

“Our fellow pastors and prophets have portrayed churches as business. They have commercialised the gospel hence attracting the taxman. You see some are selling wrist bands, building bricks, anointing oil among many other things and realising lots of profits while churches are deemed as non-profit making organisations. This then brings more questions than answers,” Rev Dube said.

He however said Government should engage churches before finalising its legislative framework so that a line can be drawn as to who should be taxed and who should be exempted as there are churches that are not carrying out profit making endeavors.

President of the Union for the Development of Apostolic Churches in Zimbabwe Africa, Reverend Edson Tsvakai said they ought to be exempted from being taxed as they do not talk or deal with money in their services.

“Zimra should take the taxation issue to pentecostal churches because they are the ones who have commercialised the gospel, not us. We don’t even talk about money in our services. We met last week as Bishops and discussed about the issue. We resolved that we need time for self-regulation as a body,” said Rev Tsvakai.

United Family International Church spokesperson Pastor Prime Kufakunesu said they would not comment until the plans have come into fruition and become a law.

Churches are registered under charitable organisations. When they want to buy land, they even purchase it at a lower rate compared to private entities.As charitable organisations, churches have gone on to build schools and hospitals to complement Government efforts in providing education and improve access to health.

While mainline churches like Roman Catholic, United Methodist, Methodist Church in Zimbabwe, Seventh Day Adventist and Anglican Church just to mention a few have always embarked on charitable projects, pentecostals have also jumped into the ship.

Recently, the EFZ commissioned five boreholes in Mutoko under a project dubbed Water For Life in Jesus Name. This project, which aims to provide water in dry areas, is supposed to run for the next five years.

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