Why aren't Churches Taxed?

In Australia, the tax status of churches and religious organisations has been a topic of ongoing debate. Most people hear that churches are not taxed but the reality is more nuanced. Churches enjoy certain tax exemptions and here's why:

Tax Status of Churches

Churches in Australia are classified as charitable organisations. That means we should contributing to the community through various services such as social welfare, education, and community support. We often provide essential services, such as:

• Charitable works and community support

• Education and training programs

• Health and wellness initiatives

• Crisis support and counselling

I'm the pastor of a church, here in Glenorchy, Tasmania. We're a small-ish church (we'd have 65 attendees on a normal Sunday, 90 if J & K are on morning tea). We work hard at making an impact in our community. While our work is not going to make the news, it is going to make a difference in a few people's lives. If we can get more bang for our buck by having less tax, then it's a win win. I'll let the locals be the judge.

The reality

When it comes to salaries, we do get taxed like other employees (at the 40 something percent bracket). My church people put their hands into their pockets and pay my salary. Once you count super and work-expenses it is the largest expense of our small church. Most churches' would be the same. So, in that sense, almost all of the income generated in our church is taxed. I'm totally OK with that because I didn't get into this job to rort the system. I came to revolutionise the community.

Conclusion

Balancing the need for social services with the financial sustainability of not-for-profits is key to ensuring that we can continue our important work. The moment we refuse to do the work God has called us to do is the moment society suffers. My thought is this: if we get tax relief from our government then our government should see the benefits of that relief. May the church be at the forefront of bettering society one person at a time.