Govt demands cash from churches

via Govt demands cash from churches – DailyNews Live 14 NOVEMBER 2013 

Zimbabwe’s cash-strapped government, which has failed to come up with a budget has now become desperate and is moving in to tax churches and non-governmental organisations, the Daily News has been told.

With millions of people turning to Christianity in the last few years, government is said to be looking at ways to make churches prime targets for taxation.

The Daily News was yesterday told that so bad is the cash situation in government that Zimbabwe Revenue Authority (Zimra) officials were yesterday visiting churches making inquiries about their sources of income and seeking information on people who make donations.

Zimbabwe’s tax agency plans to visit  all local churches and non-governmental organisations as part of an investigation into tax evasion.

At the time of going to press yesterday, Taungana Ndoro, the Zimra chief of corporate communications had not responded to questions  sent to his office on the planned crackdown on churches.

But officials said Pentecostal churches, who draw huge crowds to their congregations every week, were prime targets of the raids by  customs agents seeking to collect money from the churches which operate as charity organisations.

Government obligations and deficits have continued to escalate, pushing the Zanu PF government into desperate measures.

President Robert Mugabe’s administration has responded to the economic crisis, characterised by an enormous burden on the State’s already strained budget, by targeting churches for a shakedown.

The move could significantly hike churches’ tax liabilities amid accusations by the tax collector that churches were funnelling funds abroad.

Since elections on July 31, Mugabe’s government has cracked down on capital flight and tax evasion in a bid to shore up government finances.

The crackdown on churches could have been torched by Tourism minister Walter Mzembi who recently suggested that churches should be taxed but he appeared to backtrack on the issue suggesting that he could have been misquoted.

Zimbabwe has missed the third-quarter budget revenue targets as economic growth cooled down, with mineral royalties tumbling, underlining the formidable task government faces  to shore up the economy.

Mining royalties — one of Zimbabwe’s key revenue heads — took a knock in the quarter to September 2013, slumping 39 percent to $39 million due to depreciating international mineral prices.

During the period under review, tax collector Zimra targeted to collect $63,7 million in mining royalties.

Given the intensifying budget difficulty, government is hell-bent on moving in on churches for taxation, top government officials said.

Zimbabwe’s Income Tax legislation exempts from taxation, ecclesiastical institutions of a public character and this covers the receipts and accruals of religious organisations.

But like all employers, religious organisations are required to register with Zimra as an employer and Pay As You Earn (PAYE) should be withheld from remuneration accruing to employees.

The remuneration includes the pastor’s stipend and other benefits like housing and motoring benefits.

The crackdown will target records in respect of remuneration, with churches risking liability for payment of the outstanding PAYE, penalties and interest.

More importantly, government will be targeting buildings leased by religious organisations.

The law says where rental income is received from a lessee who is an informal trader in respect of residential accommodation, premises or a place on which trade is carried on, the organisation is required to withhold an Informal Traders’ Presumptive Tax equal to 10 percent of the rental.

This withheld amount should be remitted to the Zimra within 30 days from the date of such withholding.

Failure to recover or remit the Presumptive Tax renders the church itself liable for the payment of the outstanding Presumptive Tax, interest and penalties.

Government will also be targeting religious organisations which enter into contracts for the supply of goods or services resulting in an obligation to pay amounts totalling $250 or more.

At least 10 percent of the total invoice value should be deducted and remitted to Zimra, unless the payee furnishes a valid tax clearance certificate confirming that their tax position is satisfactory.

The tax man will also be closely looking at rebate of duty on goods imported for religious purposes.

The dragnet will also look at the importation of second-hand or used motor vehicles for churches.

The Evangelical Fellowship of Zimbabwe has said its members will comply with the proposal to tax profit-making activities by churches.

EFZ’s general secretary, Reverend Lindani Dube, said while churches were ready to comply with the government’s proposals, it should not be forgotten that income-generating activities by churches helped the institutions sustain themselves.

“As law-abiding citizens, I think it would be good practice to comply with progressive business regulations in the country, particularly in clearly defined spheres such as profit-making ventures. Consideration, however, should be made considering that churches are spiritual and social institutions that give to their communities,” he said.



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    You Godless creeps!

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    Good god cant believe the desperate measures

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    madzana 10 years ago

    sons turning against their own Fathers, ko hondo dzamakarwirwa paMweya muchabhadhara here tax yacho kuchurch and can you valuate it in monetary terms and Shishakh, the King of Egypt came to Rehoboam, the King of Jerusalem????

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    Lloyd 10 years ago

    Yu guys dont play with fire. Gvt i warn yu to leave God’s money yakadaro nyangwe ikawanda sei. We pay those tithes and offerings t God and support His work, its not yours. Curb your corrupt activities mari munayo. While other gvts pay tithes t the church, yu want t take frm the church. What a shame and desperation. Just try it and see how God will deal with yu.

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    Washumba 10 years ago

    Desperate situation/desperate measures we cannot even look after our Pastors now you want us to look after the government.

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    Bhola 10 years ago

    I think the revenue authority is well within its rights to look into the activities of many churches. It is well documented that church donations can be used as a way of evading tax/cleaning money etc. They have not mentioned taxing donations. However, if a church employs people, if the pastors are remunarated by the church, they should be subject to PAYE and other regulations.
    Once again, people are sensationalizing a normal government activity and using it for political gain.

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      Then find those responsible moron, dont make all the churches pay for the sins of the few. The problem is that it is taxing the tithe of people that has already been taxed. Pray tell me Bhola where is this “normal government activity”? This is because a zanupf government do not know where else to go and now they rob God! How low down can you go mugabe?

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        Bhola 10 years ago

        If you were to actually understand what government are saying, they are not looking to tax donations. They are going to be investigating the donations themselves, and possibly looking to tax any businesses that the churches are engaging in. Many churches are doing propperty developments, some of them even own car sales. These enterprises, although run by a church, should still be subject to tax. Also, if people are employed by the churches, they should be subject to PAYE, AIDS levies etc… If a church buys goods or pays for services from companies without the appropriate tax clearance certificates, they should withhold the 10% that other businesses do and remit to ZIMRA in accordance to the law. The scripture say “Give to Ceasar what is Ceasars”

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    Bhola 10 years ago

    PS, many churches in the United States and other western countries are subject to tax investigations, anti-money laundering investigations etc. This is a normal function. Nothing desperate/unGodly about this…

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      “Investigations” are acceptible, did you read the article…”Govt demands cash from churches”. Demands demands demands….Did you read this…
      Government obligations and deficits have continued to escalate, pushing the Zanu PF government into desperate measures.
      President Robert Mugabe’s administration has responded to the economic crisis, characterised by an enormous burden on the State’s already strained budget, by targeting churches for a shakedown.
      What a bunch of losers and you support this? MMMmmmmm!

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        Bhola 10 years ago

        I think we need to look past the sensational headline and look at the context. If the receives an invoice from a supplier for goods worth $1000, and this individual does not have a tax clearance certificate, the church is supposed to with hold 10% of the invoice amount (ie $100) and remit that to ZIMRA. Effectively, the supplier gets paid $900 and the church remits $100. This is not a burden on the church as they still pay $1000 for the goods.
        If I am an employee of Celebration ministries (A guard, a driver, an administration assistant etc..) I am formally employed. Even though I am employed by a non-profit organization, I still have to pay PAYE like every working citizen.
        If on a Sunday, the church receives $20,000 in tithes, this is not going to be subject to tax! However, if an individual donates $100,000 to a church, that should set of a trigger and an investigation by the Revenue authority. Same way, if you deposit $100,000 cash into a bank, the bank initiates anti-money laundering investigations and the RBZ is notified.
        If a bank operates a business, where they are putting markups on goods and services, charging rent etc, that venture (not the church itself) should be subject to VAT and other tax requirements. Because, although the church itself is non-profit, they are engaging in profit making activities (not sunday tithes).
        I am also sure that these activities will be given some sort of tax exemptions if the proceeds go towards community development, poverty initiatives and other works of God.

        Our government has many failings, and we are all aware of them, but lets move away from assuming that everything the government does is bad. It isnt only Zimbabwe (ZPF government) that subjects churches to tax scrutiny. Lets be objective about this please!

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          Wiseman 10 years ago

          Thanx Bhola, nw i get it but the way the matter is put across it makes it look so dirty where in actual fact its some legal aspects that we just not being followed up on and that now its being revisited it dsnt imply tt its wasnt there before

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    Mr Mixed Race 10 years ago

    We have funny new churches being formed by the so-called prophets, one of them recently boasted that he is worth $60 millions and he has a company in the USA building an airport, its right for the government to tax these rich religious crooks.Go for them minister let them pay back to the society for cheating our poor uneducated people.I am happy that I have been insisting at our church for transparency church funds,implementing basic reasonable auditing.Maybe this is the beginning of closing all the loopholes in tax dodging.This should be done to all politicians owning multiple houses,farms etc.The minister should not forget to tax himself for the farms he has to be fair.

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    Boss MyAss 10 years ago

    Budget my ass, strategy my ass, government my ass, politicians my ass, promises my ass. Maybe we should tax God. Why not ? Our manifesto has excited EVERYONE. WE are the heroes who deliberated Zimbabwe from the big bad wolves.

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    Jrr56 10 years ago

    Seems the only people paying taxes are the foreign corporations who are going to be indigenised! They let everyone off their bills once, why not again, wait five years and some promises will be made.

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    msizeni silwelani 10 years ago

    Madhuku once said “any income has to be taxed regardless of its source, the law is simple.” What does he say now that he has turned politician.

    The tithes and other monies from church business ventures is for God’s messangers, so they can travel and have something to eat as they perform Godzls work. Grab it, we won’t tire we will make sure they still travel till they reach the evil hearts of a Zanu pf Govt.

    Churches do sponsor educational needs of some innocent kids who cannot access Zanu pf administered scholarships. Knowing Zanu pf, soon they will form parallel structures to the church that will seek to destroy the source of income meant to aid the spread of the word of God. They did it to the ZCTU, CFU, remember safe homes for abused girls/women by Orphrah’s ministry, a counter to an NGO led by one Makoni. Soon church sponsored scholarships will dry and our great grand kids thrust into perpatual ignorance as well.

    Conscription: a desperate means by a desperate Govt to raise funds in desperate times, naturally by force. Remember jongwe building a Zanu pf headquaters was built from funds conscripted from civil servants soon after independence. The poor fellows were made to “voluntarily” sign stop orders notifying SSB to deduct a certain percentage from their salaries towards an unknown account.

    Then we had experts explaining the neccesity of doing so like Bhola does today. Are we still gullible 33 years after.

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    It’s called desperation. Not one of these idiots have started a viable company that pays taxes. They do not even pay taxes from their salaries. Let’s see Mugabe’s tax returns. Let’s see graces tax returns from her dairy enterprises. You got to be joking. They know only how to take and steal.