What is the Church Tax and why do churches in South Africa pay taxes?
The Church Tax requires all religious bodies in South Africa to pay taxes. This law has been amended many times since then to include other religions, but churches are still required to pay church tax. If a church operates in South Africa, it has to pay taxes to the South African Revenue Service (SARS). Similarly, everyone (including foreign pastors) who earns an income (and are therefore not merely volunteering) from a South African source (i.e. a church in South Africa) will also have to pay tax to SARS.
South Africa has a long history of religious tolerance and this has led to an interesting situation where some denominations within the Christian faith have their own state-recognized religion, while other denominations do not have their own state-recognized religion but are still allowed by law to practice their faith freely.
Church Tax Law in South Africa: The Good and The Bad
In South Africa, church taxes are imposed on religious institutions in order to fund the state.
The Good: The tax law is a step towards equality between religions and non-religions. It also provides funding for education and health care.
The Bad: The tax law has been criticized for not allowing churches to make their own decisions about how they use their money and what they can spend it on.
What are the Different Types of Taxes that Churches are Subject to in South Africa?
In South Africa, churches are not exempt from paying property tax and income tax. This means that they have to pay a percentage of their income to the government.
In order to calculate taxable income, the church must know what type of taxes they are subject to in South Africa.
South African churches fall under three different taxation categories: property tax, capital gains tax and income tax.
