The Korea Herald

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[Editorial] Church sets example

Dioceses’ report to tax office deserves praise

By Korea Herald

Published : March 24, 2014 - 20:52

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Each year taxpayers report to tax authorities how much money they offered to the churches, temples and other religious bodies they attend. By presenting receipts on their offerings to the tax office, they get part of the money back in tax refunds.

It is the same with people who donate money to charities. The National Tax Service says that in 2012, a total of 5.57 trillion won was reported to be in this category of expenses eligible for tax privileges. It is a huge sum and thus requires a high level of transparency.

But there is a big loophole. Religious groups have not reported to tax authorities how much they received from each member of their congregations. This has enabled some people to fabricate receipts on their religious offerings to get bigger tax rebates than they deserve. Tax officials say as many as 80 to 90 percent of receipts for 1 million won or more turn out fake.

So we praise the recent action of two dioceses of the Korean Catholic Church, who reported to the NTS how much they received from each member of their congregations in financial offerings. It was the first time that any religious organization had taken such a step.

If religious organizations report the details of the money they receive from individual members, it will clearly contribute to preventing people from exploiting their religious activities to get undue tax privileges. It will also help increase transparency in the finances of religious groups in the country. It is well known that even churches, temples and other religious groups are not free from various types of corruption that run deep in society.

It would also be good if the Catholic dioceses’ move helped accelerate the discussion on the proposal to tax clergy members, a still elusive issue in Korean society. In this too, the Catholic Church acted first, as its priests have been voluntarily paying income tax since 1994. The Anglican Church followed suit in 2002, and some from Protestant churches and Buddhist temples pay income tax on a voluntary basis.

But because of the lack of a legal basis, most members of the clergy ― regardless of religion ― are not required to pay taxes. This “tax haven” is preserved because of opposition from some religious groups that claim their work should not be regarded as labor but as “spiritual services.”

Such a claim runs counter to the principle that where there is income, there should be taxation. One estimate shows that there are about 360,000 ministers, monks, priests and other clergy members in the country. Taxing them alone would increase tax revenue by about 100 billion won each year, according to an NTS report.

More importantly, taxing the clergy will enhance fairness and equity in taxation and improve transparency in the financial management of religious organizations. Ensuring financial transparency is essential for religious communities to gain public trust.