Churches ‘robbing’ city of money

Independent Patriots for Change (IPC) councillor Ndeshihafela Larandja has lashed out at churches for applying for exemption from paying property rates and taxes.

Larandja wants the City of Windhoek to detail how much the city loses by giving exemptions to churches and other faith-based organisations.

“Then you also consider the size of land occupied by the churches that are really mushrooming in the city.

Residents will understand when a complaint is laid about the land which is occupied by the churches,” she said during Monday’s ordinary council meeting.

She says this robs the municipality of potential revenue.

It was reported last year that the municipality was sitting with a cumulative loss of N$3,2 billion in the last decade, a N$300 million wage bill, a N$100 million annual employee vehicle scheme, N$70 million losses on bus services and a lifelong post-retirement medical aid scheme, for which it spends N$27 million a year.

“So, that they don’t see anyone being funny for laying that complaint. It is to assist the council for not really receiving more revenue for the exemption of these,” Larandja said.

This comes as the Windhoek council on Monday approved a list including 35 churches and other religious organisations that applied for exemption from paying rates and taxes.

Overall, the council approved the exemption of 61 organisations in Windhoek.

Over 60 churches in Windhoek applied to be exempted from paying rates and taxes to the municipality, Windhoek council documents reveal.

Only 33 of the 66 churches qualified for exemption from paying rates and taxes.

The value of properties owned by religious organisations is as high as N$2,1 million, with the least valued at N$144 000.

Larandja was the lone voice in the chamber speaking on the exemptions granted to churches as the matter sailed through without any of the other councillors raising an issue.

The Local Authorities Act allows for properties which may qualify for exemption from the payment of assessment rates upon submitting an application to council before 31 May of each year.

The act mentions churches, amateur clubs and educational businesses.

Property rates are based on the municipal value of property, with charges differing from area to area due to the value of the property.

Executive chairperson of the Alliance of Christian Churches in Namibia Dolly Nengushe said the notion of exemptions of rates and taxes provided under section 75 of the Local Authorities Act for faith-based organisations/churches registered under Section 21 of the Company’s Act should not be altered, especially now following the adverse effect of the Covid-19 pandemic on the church constituency during this prevailing economic depression.

She said the issue of the exemptions of taxes on church property highlights the land question which remains a great challenge to many churches that want to make meaningful contributions to economic development.

“The church is of the opinion that a number of churches are not aware of this exemption under the Local Authorities Act, and as a result many are not benefiting from the provision made in this act,” she said.

She called for members of the council to rather enforce and raise more awareness of these kinds of incentives to better position churches to contribute to economic activities in the country.

“The council should rather opt to retain these laws to better position the non-profit organisations that are working aimlessly to uplift the livelihood and combat poverty together with the government’s efforts and initiatives in communities,” Nengushe said.

“The need for the church to remain open and functioning to cater for the spiritual, physiological and moral needs of the Namibian people cannot be overemphasised, especially now at this cutting edge [time] of unemployment and youth roaming the streets,” she said.

In 2018, former finance minister Calle Schlettwein, during his budget speech, said the ministry was re-considering Section 16 of the Income Tax Act to include taxing religious organisations, such as churches, involved in commercial activities.

At the time, the plan to have religious, non-governmental organisations and charities file tax returns and pay taxes on income received through commercial activities was met with opposition.

African Methodist Episcopal (AME) pastor Maria Kapere said at the time she felt the Ministry of Finance should have consulted church organisations before the planned introduction of the tax measure.

According to Kapere, during her time with the Council of Churches in Namibia (CCN), efforts were always made to engage the government on issues of national interest, particularly in the area of social development.

“The churches should have been consulted on this move. Churches never get any type of assistance from [the] government. Take the example of the Dutch Reformed Church, which had the assistance of the former South African apartheid government,” Kapere said.

“The government does not offer any type of support, but if you look at the mainstream churches, they have always contributed towards social development issues and we do not get help from the government,” Kapere said.

In 2020, finance minister Iipumbu Shiimi said the issue of taxing churches and non-governmental organisations for their commercial activities was still under discussion.