The following is my answer to a Quora
question: “Do
you believe religious assets should be taxed, or remain tax-exempt like they
are now?”
That depends on how they are registered
and run. Within the context of Singapore,
religious entities, such as places of worship, charities and homes, are
registered as non-profit entities. They
may also apply for Institute of Public Character status. This does not mean that there is no tax. There is reduced tax, but there is stringent
oversight. For example, charitable
contributions have to be spent within the financial year, or they will be taxed
at corporate rates. This means such
organisations cannot unfairly hoard wealth taken from the public. The salaries of the staff are still subject to
income tax. On the other hand, donations
to IPCs have a tax exemption, which encourages bequeathments.
I think this is a fair tax regime. We cannot allow charities to be
unconditionally tax exempt such as happens in the US, because they become
vehicles for the wealthy to engage in tax evasion. On the other hand, societies require such
vehicles to take care of the underprivileged or specific sections of the
populace, because the government cannot be expected to do as good a job when
they are the enactors of policy. There
is a Commissioner of Charities to investigate abuse and audits such entities to
ensure compliance.
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