# taxmeglises? It is not that simple


OPINION: Mega-churches aren’t exactly New Zealand’s flavor of the month. As tensions escalate across the country with the looming danger of Covid-19, figures like City Impact Church and Destiny Church have come under fire for undermining the Auckland lockdown and calling their congregation on dissent against the measures public health.

Comments from leaders such as Brian Tamaki and Peter Mortlock have once again sparked calls for taxing the income of so-called mega-churches. A petition to strip churches of their tax-exempt status has attracted nearly 50,000 signatures, while companies like Auckland’s Behemoth Brewing Company have weighed on the subject.

The fury over the recent anti-vaxxer protests has led critics to question whether large, commercial-type religious organizations should be entitled to preferential tax treatment, especially since they have demanded large subsidies from the subsidy. salary of Covid-19 and appear to generate substantial income. wealth for those at the top.

Destiny and City Impact both preach a form of “prosperity theology,” an American style of Christian worship where pastors are encouraged to show off their wealth. Church members are promised that their faith and gifts will increase their own wealth.

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Destiny Church leader Brian Tamaki addressed thousands of anti-lockdown protesters during a protest at the Auckland Estate on October 2. He attended a second event on October 16, but maintains he did not host either (first published October 30).

The recent petition is neither the first nor the last of its kind. A similar event in 2016 surpassed 120,000 signatures after Brian Tamaki said the Kaikoura earthquake in 2016 (which left two dead and 57 injured) was caused by gays and sinners. He apologized for the comments three years later.

So, could a tax on mega-churches ever come into effect? Is it achievable or realistic? The answer to these questions seems to be “no”.

Churches are exempt from income tax as they are classified as charitable under the law, provided they fulfill one of the following charitable purposes; the alleviation of poverty, the advancement of religion, the advancement of education or “other purposes beneficial to the community”. The income is tax exempt, but the funds must be used for charitable purposes. However, charities and religious groups pay PAYE on wages.

City Impact Church Leader Peter Mortlock.

City Impact Church Leader Peter Mortlock.

Modern charitable law has its roots in the English law of 1601, when Elizabeth I reigned as Queen of England and Ireland. Under New Zealand’s Charities Act, a distant cousin of English law, churches and other places of worship meet the charity requirement if they meet the above criteria. In short, it would take centuries of jurisprudence to respond to the petitioners’ requests.

Besides the thorny issue of categorizing and capturing a mega-church, efforts to tax religious institutions could also end up penalizing small, communal places of worship.

For every ostentatious and attention-seeking mega-church leader, there are countless others who work quietly and positively for their communities. To contrast with recent anti-vax protests, see recent work done by the Assemblies of God Church of Samoa, or the food packages distributed by the Supreme Sikh Society during the pandemic.

Amid widespread criticism, is the current tax system for churches fit for purpose? Or could New Zealand sink into an American-style landscape of hyper-partisan mega-churches, posing a nightmare for the collector?

Experts believe New Zealand’s framework for taxing charities and religious groups is strong, by international standards.

Susan Barker, founder of Sue Barker Charities Law, a charity and tax law firm, has co-authored a book on the subject, The Law and Practice of Charities in New Zealand.

She believes the “feverish” calls to tax churches neglect the social good that groups provide.

“They’ve been doing the job of government, in terms of a social safety net, since the turn of the 19th century,” says Barker. “If we take that away, more of it will come back to the government. It will cost more, as research suggests that charities do this job more effectively than government. “

Barker doesn’t believe New Zealand will end up like the United States, where the financial activities of large religious groups fall under the jurisdiction of an overwhelmed Internal Revenue Service.

New Zealand has “the most comprehensive financial transparency and accountability rules for charities in the world,” overseen by Charities Services, she says.

“Everyone involved in charity has a duty to devote all of their funds to the pursuit of charitable goals. No one can legally derive private pecuniary profit from a charity, ”she said.

“Churches must file the financial statements of all their charities in the charity register and make them available to the public. If the money is not spent on charity, then everyone can see it.

“The embezzlement of money is a violation of charity law, and that’s what transparency and accountability disclosures should be able to reveal,” she adds. “If there is any wrongdoing, it will be publicly disclosed. “

She thinks the call to tax mega-churches is “a red herring”, and warns against a slippery slope in treating some organizations differently because of their political views.

Daniel Dunkley.

Provided

Daniel Dunkley.

“We have to stop and think about what kind of society we want to live in, because we will only have one society where everyone agrees with what everyone else is doing. What kind of society is this? Pluralism and diversity are the values ​​of democracy – people have to be careful what they want. “

While mega-churches meet the definition of a charity under the law, some believe there should be a deeper dive into large churches and how donations are spent in those organizations.

Senior members of the tax working group have expressed interest in getting a more detailed look at donation income and expenses in 2018, according to a tax industry source.

Although some commentators believe New Zealand’s current framework is strong enough, calls are underway to review tax privileges held by religious groups and registered charities, especially the business operations of religious groups. Upcoming changes to the Charities Act may require charities to justify hoarding multi-million dollar cash reserves within their businesses.

As long-standing legal precedents, tradition and growing mega-churches come into conflict with a more and more secular A New Zealand company, the tax debate is unlikely to go away with this latest online petition.


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