- In his petition, Dr. Gikenyi specifically targets the exemption of churches, which he says are making income from tithes, offerings, donations, and other sources, but are not contributing to the national revenue.
A Nakuru man has moved to court to challenge the constitutionality of the income tax law that exempts churches and other entities from paying taxes.
Dr Magare Gikenyi, a medical doctor, argues that Section 13 of the Income Tax Act, which lists the entities that are not liable to tax, violates Article 201(b) of the Constitution, which requires a fair sharing of the tax burden among all Kenyans and all sectors of the economy.
In his petition, Dr Gikenyi specifically targets the exemption of churches, which he says are making income from tithes, offerings, donations, and other sources but are not contributing to the national revenue.
He asserts that tithes, offerings, donations, and other exempted entities should be subjected to the same taxation standards as other forms of income to align with the Constitution's principle of fair burden tax sharing.
He urges the court to declare that Section 13 of the Income Tax Act is discriminatory and, therefore, null and void.
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The petition has sparked a debate on whether churches should pay taxes like everyone else or deserve special treatment because of their charitable and religious functions.
One of the questions that arises from this debate is how churches are set up in Kenya and whether they qualify as businesses, corporate entities, or social and charitable organizations.
Churches in Kenya are registered as religious societies under the Societies Act. To register a church, one must submit a church constitution, a copy of the national identification card, a Kenya Revenue Authority (KRA) PIN certificate, a passport photograph, a telephone number, and an email address from each society officer.
One must also submit a certified copy of a certificate, a diploma, or a degree in theology from a recognized theological institution from at least one officer of the society.
Additionally, one must submit a certificate of good conduct from the National Police Service, a tax compliance or exemption certificate from the KRA, an affidavit indicating whether they are registered members or officers of other religious societies, an introduction or recommendation letter from a registered religious society in good standing, and a list of the members of the society.
The Income Tax Act states that the income of any religious, charitable, or educational institution of a public character shall not be taxable, provided such income is not derived from a trade or business carried on by or on behalf of the institution.
Some argue that churches should pay taxes because they make income from their activities and use public services and infrastructure that are funded by taxes.
They say churches are like any other corporate entity, only that they are not profit-making. They say that the tax is based on the gross income, not the net income and that churches should contribute to national development and welfare.
Others argue that churches should not pay taxes because they are taxed indirectly through their members, who pay taxes from their incomes before giving to the church.
They say that taxing churches again would amount to double taxation and that it would violate the freedom of religion and conscience. They say churches are unlike other corporate entities because they are meant to help people and spread the gospel.
They say the tax exemption is justified because churches provide social services and moral guidance that complement the government's efforts.
The matter is now before the court, which will determine whether the income tax law is in line with the Constitution and whether churches should pay taxes. Should they?
