Taxation offense

I don’t wish to offend anyone. However, Robert M. Pirsing, author of Zen and the Art of Motorcycle Maintenance: An Inquiry into Values, commented “When one person suffers from a delusion, it is called insanity. When many people suffer from a delusion it is called religion.” Recently I heard a conference presenter quote this and add: “And you can then claim tax exemption!”

The problem of tax exemption for religious organisations was recently raised in an article in the New Zealand Listener (see The God Dividend). The article was based on an interview with Max Wallace, author of The Purple Economy. The problem arises from the fact that our legislation, in common with many other countries, defines the advancement of religion as a charitable purpose

Section 5(1) of the Charities Act 2005 states that “charitable purpose”

“. . . includes every charitable purpose, whether it relates to the relief of poverty, the advancement of education or religion, or any other matter beneficial to the community.”

I believe most New Zealanders are happy to subsidise genuine charities by tax exemption. After all, that’s only humanitarian. But this interpretation of the law enables organisations to get tax exemption for purposes which clearly are not charitable – the advancement of religion. The Charities Commission helpfully provides examples of the wording which religious organisations can use to claim exemption:

“…to advance and teach the religious tenets, doctrines, observances and culture associated with the [specify faith or religion] faith – or

…to preach and advance the teachings of the [specify faith or religion] faith, and the religious tenets, doctrines, observances and culture associated with that faith

…to establish, maintain and support a house of worship with services conducted in accordance with the tenets and doctrines of the [specify faith or religion] faith

…to support and maintain missions and missionaries in order to propagate the [specify faith or religion] faith

…to establish and maintain a religious school of instruction for children, young people and adults

…to establish and maintain a religious day school

…to produce and distribute religious materials

…to advance the [specify faith or religion] faith by providing spiritual and educational resources to pastors nationally and internationally

…to advance and teach the religious tenets, doctrines, observances and culture associated with the [specify faith or religion] faith by establishing a facility to be used for religious programmes, workshops, music and bible studies.”

Replace the words, “faith” and “religion” by ‘humanist, “secular,” “agnostic,” or “atheist” and your application for tax exemption would be denied. Because religion is defined for the purposes of tax exemption as:

• a belief in a supernatural being, thing, or principle
• an acceptance of conduct in order to give effect to that belief.

So New Zealand’s Humanist and Rationalist organisations cannot get tax exempt status. However, a local branch of the Church of the Flying Spaghetti Monster would not doubt qualify and be granted tax exemption.

Giving offense

Several correspondents attacked the listener article, expressing offense that religion should be identified and listing all the good works done by their own churches. Well, I am offended that religion has been able to obtain my subsidy through tax exemption purely on the grounds of supernatural belief. Organisations without supernatural beliefs are denied such subsidy. Where are the human rights in that. In fact, this seems to violate our human rights legislation.

Don’t get me wrong. I’m all in favour of subsidy to genuine charity through tax exemption – I just don’t want to subsidise the advancement of supernatural belief. That work should be financed completely by the believers themselves – just as humanists, agnostics and atheists finance the advancement of their beliefs.

So, what about it. Wouldn’t it be more honest for churches to register for tax exemption purely on the basis of their genuine charitable work. Maybe that would require them to form charitable trusts, or adopt financial procedures to separate their religious work from the charitable work. But so what – that’s what the rest of us have to do.

See also:
Purchase The Purple Economy
The God Dividend

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