Religious Leaders and Taxes

Should religious leaders be paying taxes? This issue is the subject of current discourse that is generating lots of controversy. According to the words of Governor Raji Fashola “……religious leaders are not different from you and me. If they earn income from that activity, it is only proper that they remit to the commonwealth, to the common pool and to the common developmental resources from which they benefit”.

I do agree with Governor Fashola that religious leaders should be compelled to pay taxes. In fact this issue is more than just paying taxes. I have always campaigned for stricter regulation of religious organisations - in terms of financial accountability. But before I go any further, I will state my interest. I’m a Christian and I do attend a Pentecostal church. But I will also be the first to criticise the Christian faith and more especially the Pentecostal mission. I believe they are the most guilty when it comes to financial transparency and accountability.

It is very unfortunate that whenever anyone criticises the activities of the Church or their leaders, you are likely to be classified as an ‘anti-Christ’. Even when such criticisms are genuine and unbiased, church evangelicals will label it blasphemous!

For me, most of Nigerian churches and their leaders can be accused of ‘double dipping. On one hand, they claim to be charity organisations – hence should be tax exempt, but on the other hand, they are reluctant to be transparent about their financial dealings. The fact is no one really knows the balance sheet of these Pentecostal churches or how much the leaders earn in salary. And it is even more unfortunate that the government allows this financial recklessness to perpetuate.

Why wouldn’t religious leaders pay taxes? I agree with Governor Fashola, that these religious leaders use the roads, their children use the schools, their wives use the markets, they use water, they enjoy the benefits of the security the government provides. So they are happy to enjoy these freebies at the expense of the masses who struggle hard to keep up their tax payments. But on the other hand, they can continue to live in their palatial mansions and junket around the world in their private jets.

However, the structure of Nigerian churches (especially Pentecostal) will make it very challenging for the State Government to enforce the tax regulation. The Federal tax law exempts religious institutions from tax payment but not leaders of religious bodies who earn salaries from such organisations. We currently have a situation where there is no clear delineation between the church and its leaders. Most of these leaders are not on any stipulated salaries. Some will even tell you that they don’t earn salary but live on goodwill of church members! We then need to ask ourselves, is it public goodwill that has helped purchased multi-million naira private properties? Is it public goodwill that paid for multi-million dollar private jet? Is it public goodwill that pay for the exotic holidays? Is it public goodwill that pays for the convoy of expensive cars? We’ve heard it all before!

The truth is they run these churches like a one-man private business or what I will term as ‘sole trader’. They dip their hands into church funds as if it is their family inheritance. They use church funds to finance their grandeur lifestyle. They live in the most expensive areas of the country. They are happy to show off their private jets as the Lord’s doing that his marvellous in the eyes of the ‘poor’.

The Churches themselves are no exception. We are now seeing churches engaged in secular business. As I wrote in one of my piece, Nigerian churches are now big time real estate investors. Some of the most expensive educational institutions in Nigeria today are owned by religious organisations. I wouldn’t be surprised if some have invested in the stock market. But that doesn’t really bother me. My concern is, we need to know where charity work ends, and profit-making begins. A charity organisation (which includes Churches) should not be engaged in any profit-making activity. In an ideal world, they are not expected to have huge bank balance, if they sincerely engage in charity work. It is only fair that if a church has property which it rents out and from which it earns income, it should pay tax from such earnings.

So what am I saying? You can be sure that some of these dodgy Church leaders will do everything to circumvent the system. And until, the Government sets up a regulatory authority to monitor the activities these churches and their leaders, Governor Fashola will be facing an uphill task.