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Where does Church wealth come from and why is religion tax-exempt?

A Xt3 Member asked at 1:28am on October 4th 2017
Hi Father,

I read an article on a Catholic website on how it is the church uses its wealth to help people but where does those millions of dollars actually come from to begin with?

Also, there is a lot of people who say that religions should be taxed and should not have this non-profit status. I understand there are certain religious liberties the government should not be infringing upon but what is the purpose of the tax exemption status of the Catholic church for example?


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Hi Antonio, very often what's called the wealth of the Catholic Church, particularly in a country like Italy, is the presumed value of its churches and works of art in places like the Vatican Museum. But these are unsellable, since the laws of Italy would never allow them to be sold, and in the case of the Vatican, the works are held there for the enjoyment of the whole of humanity. After that, the Church's wealth in each country depends on the contributions of faithful Catholics, and is normally used for the upkeep of the many Catholic services often not only to Catholics but to the poorest people in those communities. Countries like Germany, where Christians of the various Churches there pay a percentage of their tax for their Church's upkeep use a generous amount of what's over to support poorer Churches, for example in Africa.

However, individual clergy have to pay taxes in most English-speaking countries, including Ireland and Australia, if their earnings exceed the non-taxed minimum wage for citizens.

Every country is at liberty to work out its own tax arrangements, and generally there are the kind of exemptions all non-profit charities receive for their charitable works, while other sources of wealth, like land or property may be taxed. I'm no expert, but I imagine if you check out the tax arrangements of countries whose political tradition tends to be extremely secular, like France, or the US with its strict constitutional separation of Church and State, you'll find that exemptions are much the same as are extended to all religions and to NGOs like Amnesty International or the Red Cross.

Once I was asked on behalf of the Hindu Hare Krishna Movement in Ireland to defend their appeal before the Irish Tax Court, as the government was about to remove their tax exempt status, and I'm happy to say they won their appeal - while I don't happen to share the Hindu faith, even less the Hare Krishna version, I was certain they were a genuine religious movement and shouldn't fall under our normal tax laws.

To come back to your question, the purpose of any tax exemption in any country will be decided by its political rulers, and the Church is required to make its case like any other charitable body. And as happens, for example, in mainland China, and under some Communist governments, high taxation can be used as an instrument to repress and if possible destroy the Church. Very best, Fr Brendan
Xt3's Ask a Priest answered at 12:03am on October 9th 2017 reply

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