Wondering Why?

Why do churches do not pay taxes?

In many countries around the world, churches are typically not required to pay taxes. Whether these are income or property taxes, most churches are generally considered as non-profit organizations and so they are not obliged to pay any tax to the government by virtue of the law. In order for an organization to be classified as non-profit like most churches, various criteria must be met but the most basic is that the operations of the said organization must not be for the purpose of gaining profit. Under most circumstances, churches literally do not operate to gain profit but rather to serve as venue for religious worship and provide various social services to its members. With these activities, many churches are given a tax-exemption status by various governments around the world.

The activities of churches must also fall under the basic criteria of operations for public servicing instead of for profit. Many church leaders and members engage in so-called charitable activities like gift-giving and livelihood programs for the poor. As long as activities are directed towards serving the church members or a particular sector of society for example then the church is labelled as a true non-profit organization. Being classified as an organization that exists for its services toward people and not for profit, many churches exempt themselves from the usual taxes imposed by different governments.

There are cases though wherein some church activities are being taxed by the government. Some churches for example operate private schools in some countries and various governments have imposed some taxes on these activities because the churches behind them actually gain some profit. Setting up a school is just one of many church-led activities that somewhat force many governments to collect taxes from some churches. In many cases though, churches are given tax exemptions in general because of their wide involvement in terms of providing social and spiritual services to its members.


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