Mr Abdulai Ali- Nakyea of the ‘Ali-Nakyea and Associates’ has advised religious bodies especially churches to separate their businesses from the church’s role as religious organisations.
He said a religious institution which is engaged in business and has business income is subject to all the responsibilities of any other company for taxation purposes.
Mr Ali-Nakyea elaborated on the tax law of Ghana in relation to the church at a programme organised by the Fijai branch of the International Central Gospel Church (ICGC) in Takoradi, to enlighten members of various religious bodies on things that are taxable.
The programme was held on the backdrop of government’s recent proposition to tax religious bodies and to make the Christian fraternity know the distinction between a church and a business.
Mr Ali-Nakyea explained that religious bodies fall in the category of a charitable organisation since it is not a profit making body.
Such entities must have been established to operate as a religious institution of a public character and must not engage in a party-political activity or support a political party or use its platform to engage in politics.
The religious institution must not perform any other function either than the purpose it was established.
He said under the section 97(5) the exempted income of a religious institution does not apply to the business income of such an institutions.
The Renowned lawyer said the exempted income of a religious institution could be determined by the traditional means through which they received income as in collection, tithes, gifts or donations.
Meanwhile, if the mode through which the religious institution received money comprised consultation fees, healing fees and the selling of items such as oils, soaps and water, then that entity is no longer a religious institution and hence falls out of the charitable organisation and must therefore be taxed.
This, he explained was because religious institutions that charged consultation and other fees were no different from hospitals and other consultancy businesses.