Guiding consumers since 2009

Possible tax non-compliance in religious sector

By Isabelle Coetzee

The South African Revenue Service (SARS) recently launched an investigation into possible tax non-compliance in the religious sector.

In a statement SARS explained that, “Certain religious organisations and leaders are enriching themselves at the expense of tax compliance, and their altruistic purpose.”

This follows a report released by the CRL Commission in July last year in which it unveiled that certain religious institutions were not abiding by the law.

“Some do not even disclose to SARS the amount of money they make per year and thus avoid paying tax,” the report read. “Most institutions are registered as NPOs, but their annual turnover is way beyond the NPO limit, and yet they do not declare this to SARS.”

According to SARS, religious institutions can apply for tax exemption from them, on condition they abide by the following criteria:

  1. Conducting activities in a non-profit manner with an altruistic or philanthropic intent;
  2. No such activity is intended to directly or indirectly promote economic self-interest of any person other than by way of reasonable remuneration paid for services rendered;
  3. Religious institutions are prohibited from directly or indirectly distributing funds to any person other than in performing their religious activity

Michael Swain, executive director for Freedom of Religion South Africa (FOR SA), commended the CRL Commission for exposing tbese illegal activities.  

He maintained that these problems can be solved by further enforcing existing laws, rather than creating new laws.  

“Freedom of religion cannot be used as an excuse or reason to disobey or evade the law of the land, including the tax laws,” said Swain.

“In principle, there should be no objection to SARS and other State agencies applying and enforcing existing law, and where there is resistance, that in itself may be a good reason for SARS to probe,” he stated.  

Swain also pointed out that, while some religious institutions attempt to take advantage of tax exemptions, others may simply misunderstand the proper legislation.

In light of this, SARS intends to reach out to the faith community to raise awareness about the relevant tax obligations of religious institutions.

Recent Articles

Featured What to do when you’ve been denied a home loan

After months of scanning property sites and attending showhouse after showhouse, you’ve finally found what you’ve been looking for. But your dream of owning a home comes crumbling down when you receive the news that you’ve been denied a home loan. So, what now?

Can your retirement annuity be used as collateral for a loan?

If you have a retirement annuity, you may have wondered whether you can use this as collateral when you take out a loan. We decided to do the leg work and find out whether this is possible or not.

Best travel cards offered by top South African banks

Planning a trip abroad involves a lot of administration. You need to consider travelling arrangements, reasonable accommodation, and a daily itinerary. But have you considered how you’re going to pay your bills once you arrive? Besides considering bank costs, you also need to consider exchange rates.

Best ways to save your money short-term

For many, it seems close to impossible to save when spending on holiday getaways, Christmas gifts, while also trying to ensure there’s money left to survive January. Justmoney takes a look at the best ways you can save during the short term.

Deals

Marble Gift Card Special

Price: From R1000
When: Until 25 December 2019
Where: Johannesburg

Trennerys Hotel and Camping Januworry Special

Price: R950
When: From 10 to 31 January 2020
Where: Centane (Eastern Cape)

Bakwena Standard Packages Special

Price: From R999
When: Until 31 December 2019
Where: Nationwide