Recently, the Founder of INRI Evangelical Spiritual Church, Elija Ayodele, took a swipe at churches in Nigeria that do not do enough to alleviate the sufferings of their members.
According to him, it is sad that although many Churches receive donations in billions, they find it hard to give to the less-privileged in their congregations. This may have also reignited the general argument on whether churches should pay tax to the coffers of the federal government due to the huge amounts they reportedly generate.
Similarly, a former Minister of State for Interior, Chief Demolan Seriki, said “in the face of the dwindling price of crude oil, churches and mosques that own businesses should pay tax to the government.”
He explained that religious bodies, especially churches, had built large business empires, including universities, but many of them were not paying tax, adding that “the wealth being made from these businesses was used in buying private jets with the government losing out.”
According to him, “places of worship such as churches and mosques should not pay tax but when they go into investment outside their main focus, they must pay tax.”
He noted that some churches have hundreds of houses on their various religious camp grounds, but do not pay tax to the government because they are registered as religious organisations.
Already, some state governments, like Imo state, have started making efforts to begin to tax religious institutions. Imo state Commissioner for Internally Generated Revenue and Pension Matters, Dr Orikeze Ajumbe, recently described the initiative as “a way of increasing the state’s Internally Generated Revenue” via capturing companies, hotels and churches into the tax net.
In 2014, Forbes reported that five out of the world’s top 10 richest pastors are Nigerians. With a net worth of $150 Million, Bishop David Oyedepo, who is the founder of the Living Faith World Outreach Ministry, is the world’s richest pastor, according to US website, richestlifestyle.com.
The publication described him as “a prosperous pastor who owns private jets and homes in the US and the UK.” He was followed by Pastor Chris Oyakhilome of Believers’ LoveWorld Incorporated, also known as the Christ Embassy, and popular with executives and politicians, on $30 million to $50 million.
Pastor TB Joshua, of the Synagogue Church of All Nations, is also believed to be worth over $10 million. According to several researches, hundreds of millions of dollars change hands each year in these popular Pentecostal houses of worship. In this vein, there have been several outcries that churches are not paying property and federal income taxes along with a host of others, including reduced rates on for-profit properties and parsonage subsidies.
Moshood Iliasu Adetoro, an expert in business analysis and management, said: “Some churches and mosques have a continuous cash flow for stipulated periods. They have their statements of income and expenditures. Whenever the income of any of them exceeds expenditure, then such organization should pay a portion of their surplus to tax.”
The Bayero University Graduate in business administration and management further explained that “a lot of researches have shown that the easiest way to make money now is through religious organisations.”
In fact, Mr Adetoro believes that some business organisations that pay taxes to the government “don’t even realise half of what the religious bodies make.”
He said government can generate more revenue from “these establishments as there seem to be an increase in the number of churches and mosques in recent years”.
Reports suggest that some of the churches can hold more than 200,000 worshippers and, with their attendant business empires, they constitute a significant section of the economy, employing tens of thousands of people and making a whole lot of money through tithes and offerings while exporting Christianity globally.
The National Bureau of Statistics (NBS) declined to comment on how churches fit into their GDP figures, but a source there said they were included as “non-profit”, which falls under “other services” in the latest figures.
In 2013, the category contributed 2.5 per cent of GDP, the same as the financial sector. According to a Lagos-based economist, Bismarck Rewane, churches and other religious institutions “don’t summit their accounts to anybody and thus it’s difficult to know how much they make.”
Several reports have also emanated from banks on how pastors of these mega churches try to invest huge sums of money from contributions to the churches. More so, reports few years ago suggested that a popular pastor was charged by the Economic and Financial Crimes Commission (EFCC) for laundering $35 million of contributions to his church in foreign bank accounts.
He, however, denied all wrongdoing and the case was dismissed for lack of evidence.The Director, Social Communications, Catholic Archdiocese of Lagos, Very Rev. Msgr. Gabriel Osu, defended the non-payment of taxes by reiterating that genuine churches and mosques are supposed to be non-profit organisations meant to alleviate lapses in the social and religious lives of the people.
He explained that there is no single government input into the church’s headquarters & Covenant University campus as the church itself supplies their own water, roads and other amenities; hence there is no basis for being taxed.
Bishop Oyedepo also argued that incomes generated by the church are used to build schools, and also to serve the needs of the poor. While the debate on taxing religious institutions, especially churches rages on, a research by the University of Tampa, a major business city centre on Tampa Bay, in the United States, suggests that the country loses an estimated $71 billion due to exemption of religious institutions from taxes.
Despite the churches claiming to be charity organisations, the research revealed that only 29 per cent of their revenue is spent on charity, while about 71 per cent goes into ‘operating expenses’. This is nowhere close to the American Red Cross which uses 92.1% of revenues for physical assistance and just 7.9% on operating expenses.
An officer from the Ministry of Women Affairs, who pleaded anonymity, explained to Economic Confidential that a lot of religious bodies generate incomes through various affiliates like schools they own and other business ventures.
“So, they have to pay taxes or else everybody will use religion as a shield to own businesses and evade taxes,” the official said. The source further said, for example, Living Faith Church owns a university and also runs programmes in colleges.
As a matter of fact, the college of developmental studies (CDS) and the College of science and technology (CST) are both owned by Living Faith Church alongside Covenant University.
An editorial in a national daily also argued that the decline in oil price may have necessitated the recent call for the taxation of religious institutions which makes it a better time to ensure that churches and mosques remit taxes to the federal government.