How Sars is clamping down on religious institutions' tax compliance

The South African Revenue Services (Sars) has warned that it will be investigating churches that do not pay tax.

The revenue service warns that it will investigate churches that are run like businesses and pastors who use church assets for their own benefit.

Tax manager, Tertius Troost spoke to CapeTalk's Refilwe Moloto and provided insights into how this would impact for religious organisations.

There is a misconception that religious institutions are automatically exempt from paying taxes, he explains.

Religious institutions must be registered as public-benefit organisations (PBO) with the Sars tax exemption unit in order to receive a tax exemption status.

If they don't have the tax-exempt status, they are taxed like normal companies.

Tertius Troost, Tax manager - Mazars

Employees of these religious institutions are not exempt from paying tax.

They should have Pay As You Earn (PAYE) that should be withheld from their salaries at the end.

Tertius Troost, Tax manager - Mazars

These PBOs can lose their tax exempt status if they are paying excessive amounts to their employees.

Tertius Troost, Tax manager - Mazars

The Sars tax exemption unit can also take away the status if they feel it's being used to evade tax by these religious institutions.

Tertius Troost, Tax manager - Mazars

Sars is still engaging religious institutions and investigating methods that would ensure these institutions, usually exempt from tax, are tax compliant.

To hear the rest of the conversation, listen below:


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