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Sukulwenkosi Dube-Matutu, Gwanda Correspondent
THE Zimbabwean Christian Ministers’ Association (ZCMA) has called on Government to exempt small churches from paying taxes as this would cripple their operations.
Speaking during a workshop in Gwanda recently which was organised by Zimbabwe Revenue Authority (Zimra), ZCMA Matabeleland South provincial chairman Mr Lovemore Dube said most churches were struggling to operate because of the prevailing economic hardships.
“We are glad that Zimra officials decided to hold a workshop with members of our association in order to clarify the issue of taxation of churches.
When the announcement was made we were left with a lot of questions. First of all we are concerned about why we were not consulted as churches on this issue.
“Secondly it seems that churches are being punished just because of a few big churches that are making a lot of money through their ministry. Those are the churches that have to be taxed and not all churches. Small churches are struggling to get by because members are failing to tithe and give offerings because of financial challenges,” he said.
Mr Dube said Government must realise that churches were non-profitable organisations which sought to preserve social values.
He said churches also have a social responsibility of giving back to the community and assisting those in needy.
“It’s not proper to tax churches because of the responsibility they have in society. Zimra has said churches that are engaged in any form of business venture are subject to taxation. Some of these business ventures have been initiated as a strategy to cater for the underprivileged in society such as orphans and widows and to sustain operations through these economic hardships.
“The Government should revise this legislation by setting a stipulated threshold. Churches that make exorbitant money should be the ones taxed otherwise this initiative will scare away church members,” said Mr Dube.
Addressing members of the association Zimra domestic taxes specialist, Mr Amen Hove said taxation of churches was implemented on 1 January 2016 although it had not been fully implemented. He said if a church was engaged in any income generating or business related activities then money generated through such activities was subject to taxation.
He said income that will be exempted from taxation included donations, tithe, offerings and others contributions by members.
Mr Hove said taxation of churches was initiated by a change in legislation. The changes to the income Tax Act that were brought about by the Finance Act that was signed into law in November 2015 by former President Robert Mugabe, provide for the taxation of any ecclesiastical, charitable or educational institution.
“Section 14 (Income tax for periods of assessment after 1.1.10”) (I) 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 institutions is derived from trade or investment, not being income from trade or investment that is exempt from tax in terms of paragraph 2(e) of the Third Schedule to the Taxes Act,” reads the act.
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