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CONTRARY to public perception that churches do not pay taxes, a survey by the Times reveals that some, particularly the established ones honour their tax obligations.

 These include, the Catholic, Anglican Methodist, Presbyterian, International Central Gospel, Action Chapel and Pentecost churches.

 Speaking to the Times Victor Ofinam Antwi, Senior Public Relations Manager of the Pentecost Church highlighted some of the areas in which the church meets its tax obligations.

 He said the church pays taxes of staff and ministers on the Pay As You Earn (PAYE) income whilst it pays eight per cent withholding tax on rent, ten per cent on professional services, five per cent on purchases of items and construction charges.

Mr Antwi said because it always pays its taxes, the church received a Gold Award from the Revenue Agencies Governing Board for occupying the first place in PAYE category in 2007.

Rev. Joseph Appiah-Odei, Director of Finance of the Presbyterian Church, Ghana also the church was tux compliant.

“We have already filed the April PAYE with IRS for staff and Ministers”.

Rev. Odei said the other business interest of the church is organised under a limited liability company which pays tax specified by law.

He said the gift tax as mooted by the IRS can be achievable if there is a mediaism to define and identify what constitutes a gift.

 He said pastors are not the only people who receive gifts, “therefore the IRS must be able to educate the public on their obligation to pay gift tax.

Mr Charles Botchway, Manager of Finance and Administration of the International CentralGospel Church (ICGC).  Churches as a body are exempted from paying tax because most of the revenue accruing from offertory and other donations goes into charity work.

Mr Botchway said, ICGC has about 10 organisations it supports in its charity outreach programmes.

 Mrs Joyce Amoa-Ntim Public Relations Officer of IRS said the law levies taxes on income and profits made from employment, business and investment.

 However there are exemptions under the tax law, including, the income of churches of a public character from ecclesiastical services, such as normal collections, thanks offerings, and tithe.

Any other businesses which generate income such as church farm, publications look shops or guest houses, are subject to tax.

 Mrs Amoa-Ntim said the one-man-churches run by individuals are not of a public character because their principal motive is for profit making.

“Therefore all incomes of such church are not tax exempt,” she said.

She said unlike the established churches, the one-man churches do not have structures like boards which determine how collections, and tithes should be used for charitable purposes.”

 On how the IRS people gets to pay gift tax, she said the IRS uses the public education to sensitise people about their civic responsibilities.

 “We hope when the message goes through, most people will do the right thing”, she said.

 Mrs Amoah-Ntim said another way the IRS gets to know of gifts is when people in their tax returns, declare having made such a gift to beneficiaries.

 “In that instance, we go after the recipients to comply with their tax obligations”, she said, adding that failure to comply may result in sanctions against the culprit.

“We may even go to the extent of publishing their names so that when others hear about it, they do the right thing” she said.

 Mr. Francis E.K. Akoto, Chief Inspector of taxes at the training department of IRS recently warned religious bodies that they risk prosecution if they failed to pay taxes on all gifts received from their congregation or sales made in churches.

Mr Akoto, who was speaking at a joint meeting to the IRS and Value Added Tax Service with religious organisation in Kumasi said profits made from the sale of things like anointing oil, holy water and other businesses run by the churches are subject to taxation.
0 votes
The clarion call is on again: “churches should pay tax.” Yawn! Repitition of the same old boring, and for the most part, respectfully, uninformed knee-jerk reaction. Fact: like every person in Ghana (natural or corporate) if a church derives an “assessable income” (i.e. income from a business, employment or investment accruing in, derived from, brought into, or received in Ghana) that church is expected to pay income taxes. And, the incomes of church workers, including pastors, are all subject to our income tax laws.

What churches (actually, all “religious bodies”) do not pay taxes on are the tithes and offerings, classified as “gifts” under the law. But that tax exemption is subject to the condition that the religious body uses the gift “for the benefit of the public or a section of the public.” Thus if the religious body uses the gift for private purposes (eg Pastors' Appreciation Day), the exemption does not apply. But similarly exempt are gifts (i) obtained under a will or intestacy, (ii) received from a spouse, child, parent, brother, sister, aunt, uncle, nephew, or niece, or (iii) for charitable purposes. The policy considerations are the same: If my son is not expected to pay gift tax on the pocket money that I give to him, please stay out of my business when I pay something to my church.
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