VICE-President Phelekezela Mphoko has condemned the taxing of churches by the Government, arguing that they could not be “taxed twice” since they were already paying tithes to God.
Speaking soon after donating about 3,000 chicks to communities in Nketa-Emganwini constituency in Bulawayo yesterday, VP Mphoko said by virtue of paying tithes to God, the churches were already paying tax.
“Churches in actual fact pay tithes to God and they have a way of doing it and therefore I believe taxing them is something strange. Churches should only pay tithes to God and as a Christian I don’t think it’s the right thing (to tax them),” said VP Mphoko.
“How do you tax churches? They pay tithes to God and you go on to tax them. I surely don’t understand that.”
The Zimbabwe Revenue Authority (Zimra), in a notice posted on its website, said churches or religious organisations were required to perform certain statutory and tax obligations as prescribed in the respective legislative provisions.
The revenue collector warned that in the event that churches failed to comply or fulfil the statutory obligations of paying the tax due, they would be forced to pay penalties and interest.
According to Zimra, churches are not exempt from the payment of Value Added Tax (VAT). They are expected to pay the tax when purchasing or consuming certain goods and services subject to tax.
Zimra was scheduled to start levying churches’ income derived from trade or investments from January this year.
The changes to the Income Tax Act that were brought about by the Finance Act that was signed into law last year in November by President Mugabe, provide for the taxation of “any ecclesiastical, charitable or educational institution.”
“Section 14 (Income tax for periods of assessment after 1.1.10) (l) of the Finance Act (Chapter 23:04) is amended by the insertion of the following definition:- ‘company’ or ‘trust’, is deemed to include a reference to any ecclesiastical, charitable or educational institution to the extent that any part of the income of such institution is derived from trade or investment, not being income from trade or investment,” the law says in part.
Presenting the mid-term policy statement reviewing the 2015 National Budget in Parliament in July last year, Finance and Economic Development Minister Patrick Chinamasa announced several austerity measures that include new levies and taxes on churches.
On plans to tax churches, the Minister said the tax would be on their income-generating projects. Most newer churches earn much income from such projects.