Religious groups must pay taxMinister of Strategy and Finance Bahk Jae-wan reignited the old debate over taxing religions. “Religious people should in principle pay taxes as well,” he said. There is no legal base for the tax exemption for religious groups and members. Yet they enjoyed venerable tax status out of customs and tradition. Many clergymen of the Catholic and Protestant churches now willingly pay taxes on their income. The Jogye Order, the country’s largest Buddhist group, is also positive about honoring its tax obligation. Many other countries, including the United States and Japan, are also considering lifting tax exemptions on various religious groups and clergies.
Some could claim that taxing labor income for religious service is against their faith. In a broader context, however, religious practices are a form of work and donations are rewards for their service. Considering the social consensus for broadening tax revenue to fund welfare programs and budgets, there should not be exemptions to the principle of taxing income resources.
Faith groups argue that taxing their donations is double taxation. If that is true, many organizations funded by donations from individual civilians should also be exempted from taxes.
Authorities could consider revising our tax code toward a new direction of levying income tax on individuals while providing breaks in various value-added and property taxes for religious groups the same as other nonprofit organizations.
The religious sector could fear state interference in their service work and religious campaigns because of tax authority. But taxation could help to overhaul bad habits and irregularities in religion. Religious groups have so far been criticized for lax finance management thanks to their tax-exempt status. In such a light, the government’s taxation could contribute to enhancing the transparency and credibility in finance management of religious foundations because personal wealth of clerics will eventually be managed by the organizations.
Tax on religion could be a symbolic action to buttress the principle of equality and fairness. More than 80 percent of religious individuals enjoy tax-free status. But taxation at the same time could trigger conflict between the government and religious groups. Authorities must take incremental steps to provide fair and objective guidelines that everyone can agree to. We need to take a prudent and specific approach in defining the scope of religious activities that require taxation.