If you haven’t noticed, we are in tough economic times. There are no jobs, even those who have jobs are loosing them, banks are not giving loans, inflation is on a high, the manufacturing sector is on life support, and even the Government is broke. To make matters worse, we just learnt that the FG recently Spent about N1.5b on this years hadj. No figures yet for the Christian pilgrimage but expect it to be within range.
These are indeed bad times and when things are this bad people in this part of the world typically look up to God. The churches are swelling by the day as more people move towards God for “prosperity” and “stability”. Lets face it this inadvertently means more money for the churches. Churches mostly depend on tithe’s donations and collections to fund their work. Nothing new as this has been the tradition for generations.
However, what’s new is the way this money is being utilized. Pastors or is it Overseers as some are called currently rank amongst the most comfortable people in Nigeria. They drive porshe cars, travel first class, live in expensive neighborhoods, have kids who school in the most expensive schools, and even have the best hair and make up stylist on their payroll. These guys don’t know what it is to be broke. They are not being chased by banks, don’t have to cut down on labour, don’t need to cut down on cost of doing “businesses” and most of all don’t need to care about taxes.
People see these Pastors living large and wonder why they can’t be taxed. The Nigerian tax laws currently excludes all religious organizations from paying taxes in Nigeria. Rightly so as they are supposedly non profit organizations. So since they are not supposed to make profits from their businesses they are not liable to paying a 30% corporate tax. How can you prove a church or mosque is making profit when they spend all the money they get on expanding the churches, beautifying them, organising crusades and vigils, and making sure their Pastor is living the life of a king all in the name of worshiping God.
I understand the need for taxation as these are tough times. The government can’t balance is budgets and can’t keep funding budgets deficits with bonds or by increasing the tax rate. But it can widen it’s tax net to areas that are traditionally excluded. One of such is the array of businesses that these churches have. Businesses that are probably conceived as non profit but in the real sense of it compete with the average business man on the street. But then they are non profit and factually so!
So what can the Government do? Not much really!! The Churches derived most of their revenue from donations, tights etc and as such cant be taxed. Besides they already pay taxes indirectly for most of the things that they do. For any property they buy the Government collects Capital Gains Tax from the seller (which is mostly factored into the selling price). Churches also pay some form of taxes whenever they buy diesel, print materials, rent chairs and canopies, rent halls for large events etc. Even their so called pastors pay taxes for their local and international travels which are very frequent and speak of volumes. They even pay levies to have their signs on billboards and the walls of any every street corner. But then is it enough? Can more be done to out some of their “revenues” within the tax net?