Are some churches cheating the tax system? Sars boss explains
Churches not being formally regulated resulted in various questions forming, such as whether they are acting legitimately.
Acting Commissioner Mark Kingon says Sars is also appointing banks as third-parties to help with debt collection. Picture: Moneyweb
Acting Sars commissioner Mark Kingon has answered crucial questions on the country’s tax laws on churches, and if the laws should be stricter towards churches should there be clear evidence that some of the benefits of the church were exploited for personal use.
Kingon was speaking on CapeTalk with host Kieno Kammies elaborating on what tax laws say about churches and religious institutions.
The radio discussion came after the Asset Forfeiture Unit attached popular self-proclaimed prophet Shepherd Bushiri’s private jet. The Hawks made an application to have the private jet, valued at R20 million, attached as part of an ongoing investigation into the leader of the Enlightened Christian Gathering church and his wife, who both stand accused of money laundering and fraud.
“I think the question we need to ask ourselves is, are these people getting personal benefits through, for instance, [the] use of jets, cars, and other instruments.”
He said the issue was to establish if the leaders of the churches were reaping personal benefits, in which case there would be a tax liability.
“We have to ensure that all churches pay their rightful portion of taxes and where [there are] businesses being undertaken by some churches, these need to be taxed.”
Kingon acknowledged that there was a definite personal benefit in some cases and a tax exemption unit was launched to tackle such cases. The unit’s primary focus is to look at tax-exempt entities which, in this case, included churches.
“Churches are not formally regulated in the country” and this meant various liberties, as some churches could be established as a non-profit organisation or a close corporation which posed the question if they were legitimate churches.
The commission was looking into churches which insisted that donations from congregants were not taxable because, according to the Sars acting commissioner, the amounts were indeed taxable.
(Compiled by Gopolang Chawane)
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