“There are two certainties in life: Death and Taxes. There is no escape from either of these variables. The inscription in the IRS building in Washington reads: “Taxes are what we pay for a civilised society.”

These were the introductory remarks by Jennifer Dodoo, Justice of the High Court, in Taylor & Taylor Limited v. The Commissioner-General and the Attorney-General (2017, unreported).

In Matthew 22:21, Jesus was asked by the Pharisees whether it is lawful to pay taxes to the emperor, or not. Jesus responded “"Render unto Caesar the things that are Caesar's, and unto God the things that are God's”. My understanding of Jesus’ statement “Render unto Caesar that which is Caesar's" is that it unambiguously commands people to respect state authority and to pay the taxes it demands of them.

Article 41(j) of the Constitution, 1992 requires every citizen of Ghana to declare his income honestly to the appropriate and lawful agencies and to satisfy all tax obligations.

Religious organisations and their leaders have come under intense scrutiny in recent times from the public as to whether or not their incomes should be subjected to tax. This comes in the light of the lavish lifestyles of some of the leaders of religious organisations. Similar sentiment has been expressed by his Excellency, President Nana Addo Dankwa Akufo-Addo. It is, therefore, important for us as a country to know the position of the law and chart a way forward in creating an all-inclusive society that promotes fairness in honouring our tax obligations.

The questions I seek to address in this contribution therefore are as follows:

a. Are religious organisations required to pay taxes and/or comply with the tax laws of Ghana?

b. Are religious leaders or founders, and employees of religious organisations required to pay taxes and/or comply with the tax laws of Ghana?

My contribution is directed towards the Commissioner-General (CG) and his officials, the Government of Ghana, Tax Professionals and Students, and the Academia in our attempt to educate the religious fraternity, and the general public, in particular, the ordinary man in “madina trotro”.

  1. Historical Antecedents of Taxation of Religious Organisations in Ghana

The 1947 Ordinance outlined the first provision of exemption from tax by charitable organisations including religious organisations. It specifically exempted religious bodies – Catholic, Anglican, and Presbyterian Churches from paying duties on imported items.

In 1961 (fourteen years later), the Income Tax Ordinance introduced the concept of exemption from payment of income taxes by ecclesiastical or charitable organisations, Christian Council of Churches, the Muslim Council, et al. This was in recognition of the contribution these organisations made in society as they prioritised the helping of the poor and needy whilst lifting the spiritual welfare of the people.

After 14 years following the passage of the Income Tax Ordinance, then came the Income Tax Decree, 1975, S.M.C.D 5. It maintained the tax exemption status for religious organisations under Section 3(1)(d) of the law. It provided as follows: “there shall be exempted from tax the income of an ecclesiastical, charitable … of a public character insofar as such income is not derived from trade or business carried on by such institution” [Emphasis mine]. This definition limited tax exemption to the Christian Church with regards to their income other than derived from business. No mention was made of other religious organisations.

In the year 2001, the Internal Revenue Act, 2000, Act 592, was enacted and came into force on 16 February 2001. The law streamlined the definition of religious organisation by going beyond the limited scope provided under S.M.C.D 5 to include religious organisations other than churches.

Under Section 10(1)(d) of Act 592, it was provided that “the income accruing to or derived by an exempt organisation other than income from any business is exempt from income tax”. [Emphasis mine] Exempt organisation was defined in Section 94 to mean a person

  1. Who or that is and functions as a religious organisation of a public character …;
  2. Who or that has been issued with a written ruling by the CG currently in force stating that it is an exempt organisation; and
  3. None of whose income or assets confer, or may confer, a private benefit, other than in pursuit of the organisation’s functions

The implication of the above definition was that, for any religious organisation to qualify for exemption, it should not only be described on paper as such, it must also act pari passu.

The religious organisation must also apply to the CG for the grant of the status of being a religious organisation as a way of serving as check and balances to curtail abuse of the tax exemption process. Lastly, the income that is being exempted should not confer private benefit.

On 1 January 2016, the Income Tax Act, 2015, Act 896 (as amended) came into force repealing Act 592 and saved Regulations, notices, and other acts lawfully done under the repealed law. This is the law on taxation of income currently in force.

The purpose of the law with regards to the activities of religious organisations is to, among others, specifically empower the CG to approve an entity as a religious organisation, revoke the approval for a good cause or in contravention of the requirement of the law. Section 97 of Act 896 covers the approval process of a religious organisation.

Section 97(2) of Act 896 provides that the CG shall before approving an entity as a charitable organisation (including a religious organisation), ensure that

  1. The entity is established to operate as a religious institution which is of a public nature
  2. The entity has a written constitution that prohibits that entity from
  1. Engaging in a party political activity, supporting a political party or using its platform to engage in party politics
  2. Any function other than operating as a religious institution; and
  3. Conferring a private benefit, other than in pursuit of a function of the entity as a religious institution

Sections 97(3)&(4) of Act 896 makes the income of a religious organisation exempt from tax except income attributable to business.

From the aforesaid provisions in Act 896, the lawmaker has empowered the CG to grant and revoke the tax exemption for religious institutions to promote tax compliance in Ghana. The CG has issued practice notes to serve as a guide in the implementation of the law in this regard.

From the historical analysis above, there are key underlying themes running through all the various tax dispensations. First and foremost, the type of organisation should be religious in nature. Secondly, the organisation should have a public character. Lastly, the income thereof should not be for private benefit.

  1. Status as Religious Organisation for income tax purposes

Under Act 896, there are 3 key conditions that must be satisfied by a religious organisation to qualify for exemption from income tax. These are:

  1. Vehicle for operation
  2. Constitution and prohibition of the organisational activities
  3. Public nature of activities

Vehicle for operation

For tax exemption purposes, a religious organisation must not engage in business the purpose of which is to make profit. Therefore, the vehicle of operation should not be by a company with shares. This is because shares confer beneficial interest in a company to only identifiable members.

By necessary implication, the route for undertaking religious organisations in Ghana may be by a Company Limited by Guarantee under the Companies Act, 1963, Act 179, or by a Trust registered under Trustees (Incorporation) Act, 1962, Act 106 with no particular individual(s) being ultimate beneficiary(ies).

From the foregoing, the objects of a religious organisation may include, but not limited to provision of service to, or conferring of benefits on an identifiable community or body or a section thereof with equal access to all intended beneficiaries without any particular individual(s) being the ultimate beneficiary(ies).

Constitution and Prohibitions

A religious organisation that seeks the approval of the CG for tax exemption must have a written constitution with express provisions that prohibit it from:

  1. engaging in a political party activity, supporting a political party or using its platform to engage in party politics;
  2. any function other than those that the entity is established to operate; and
  3. conferring a private benefit on any person other than a benefit that is in pursuit of a function for which the entity is established

Public Nature of Activities

Act 896 does not define “public nature”. However, the practice notes issued by the CG regards activities of a religious organisation to be of “public nature” where, by its activities and operations, it

  1. is open or accessible to the general public or a section of the public; and
  2. does not confer a private benefit on any person other than in pursuit of a function or activity that is in line with the objects of the entity.

The activities of the entity should not directly or indirectly be to the private benefit of the owner(s) or associates of the owner(s). The resources and income generated by the entity should not be assigned to, or distributed among the owner(s) or their associates.

  1. Income Exempt from Tax under the Tax Law

The law does not specifically mention incomes that are attributable to religious organisations which are not subject to tax. It only says that “income accruing to or derived by a religious organisation” is exempt from tax. Ordinary meaning can, therefore, be given to the stream of income attributable to a religious organisation that are exempt from tax. In practice, these may include

  • tithe,
  • offering,
  • welfare dues,
  • funeral dues, and
  • gifts and similar donations

to a religious organisation.

Notwithstanding the fact that a religious organisation is not required to pay income taxes on receipts incidental to their objects, the law requires them to file their corporate income tax returns with the Ghana Revenue Authority within four month after each financial year of the organisation. This is in compliance with Section 124 of Act 896.

  1. Income subject to Tax under the Tax Law
  1. Business Income of a Religious Organisation

Section 5(1) of Act 896 provides that the “income of a person from a business for a year of assessment is the gains and profits of that person from the business for the year or part of the year.” Income derived by religious organisation from engagement in business activities may include:

  1. Sale of anointing oil, water, and similar goods
  2. Spiritual consultation fee
  3. Disposal of assets;
  4. Provision of services (such as hiring out of venues and facilities of the religious organisation);
  5. Selling of in-house expertise to interested persons (e.g. publishing, and training);
  6. Operation of a bookshop; and
  7. Operation of commercial transport.

Section 97(4) of Act 896 provides that “income accruing to or derived by a charitable organisation is exempt from tax.” Section 97(5) provides that “Section 97(4) does not apply to business income of the charitable organisation” [ Emphasis mine]. The intention of the tax law is to tax the business income of a charitable organisation.

The intention of the law to tax the business income of charitable organisation gives rise to two key issues that needs addressing.

First and foremost, despite the provisions of the tax law, the question that needs answering is: whether or not it is legal for a religious organisation to engage in business for the purpose of making profit for which the tax law envisages taxing same?

Section 10(1) of Act 179 provides that a Company Limited by Guarantee shall not be incorporated with the object of carrying on business for the purpose of making profits. Section 10(2) of Act 179 goes on to provide for sanction for officers, members of the company and the company itself should it carry out activities for the purpose of making profit.

Therefore, to the extent that the activities of a religious organisation is required to be of public character as per Act 896, where lies in the taxation of business income of a Company Limited by Guarantee? Are we condoning contravention of Act 179? That said, for tax purposes, the taxman may be unconcerned with how the income is generated. In the case of Attorney of Hong-Kong v Reid, [1993] the court said “a principal ought to have the right to trace and to follow a bribe or secret commission” It can therefore be construed that, however an income is earned, once it is taxable, the Ghana Revenue Authority can tax same.

Notwithstanding the above, a religious organisation can engage in profit-making activities without contravening any law. This can be done where the operating vehicle is through the establishment of a Trust. Therefore, any profit generated by a Trust which has ultimate beneficiaries as individuals, the business income thereof is subject to tax.

The second question that needs answering is, whether or not the business income of a religious organisation generated incidental to its purpose of a public character without private benefit to some individuals be subject to tax?

In Chapel Hill School Limited v the Attorney-General and the Commissioner, Internal Revenue Service, [2009, Unreported] Dr. Date-Bah JSC (as he then was), said “Our comment on this argument by the Second Respondent (Commissioner, Internal Revenue Service) would be that the mere fact that what the Appellant does constitutes a business does not inevitably lead to the conclusion that the activity cannot be exempt from tax.  If the business concerned is one that falls within the purview of the educational business carried out by an educational institution of a public character, then the income from that business will qualify for exemption from tax.”

In explaining what constitutes public character, the learned judge said “… business was of public character … did not confer any private benefit to individuals.” He further said that, “… for as long as the appellant was a Company Limited by Guarantee, there was a legal assurance that its business was not conferring any private benefit on individuals.”

The court concluded that an education institution of a public character is not subject to income tax during the said period it remained as a Company Limited by Guarantee until such time that it converted into a Company Limited by Shares.

The learned judge also referred to the South African case of Chancellor, Master and Scholars of the University of Oxford  v  Commissioner for Inland Revenue, Republic of South Africa  to support his position.

In the said case, the court held that “the person whose liability to tax was being assessed was thus Oxford University, which the court held to be indubitably an educational institution of a public character.  The fact that the activities of Oxford University Press South Africa appeared commercial did not deprive Oxford University of its exemption from tax in respect of the proceeds from the business from South Africa”… “What was important was that the income derived by Oxford University from its business in South Africa was fed into its educational purposes and was not for the private gain of individuals.

It must be pointed out that educational institutions and religious institutions under enactments in Ghana prior to the year 2016 were considered as exempt organisations for tax purposes. Though educational institution is excluded from tax-exempt organisation under Act 896, religious institution remains.

Following from the foregoing, it is my humble opinion that the business income of a religious organisation is not subject to tax insofar as the income does not confer private benefit to individuals. Any excess revenue (surplus) remaining after all the expenditures of a religious organisation in any year has to be retained and applied in the future to the company’s purposes. That is to say, where business is carried out incidental to its purpose as a religious organisation Limited by Guarantee, or Trust with no ultimate private benefit to individuals, the profit is exempt from tax, simpliciter. However, should the religious organisation’s operating vehicle be by way of Trust with individuals as ultimate beneficiaries or by a company limited by shares, the business profits shall be taxable.

  1. Income of religious leaders and/or employees of religious organisations

For tax purposes, a company is a separate and distinct entity from its employees and affiliates. Therefore, a religious organisation registered as such with the Registrar of Companies is separate from the founder(s), religious leaders, or employees of the company. As a result, the exemption from tax of the income of a religious organisation is not applicable to the individuals.

Individuals are taxed based upon their income from employment, business and investment. Taxation of a resident person in Ghana is based upon the principle of worldwide taxation. That is to say, wherever the income is earned, however the monies/benefits are paid, it is subject to tax in Ghana insofar as the person earning the income is resident in Ghana. The income of an individual may arise from sources including

  1. Salaries, wages, overtime, leave pay, bonus, and similar employment income
  2. Income from business
  3. Income from investment
  4. Gifts derived in course of employment, business and investment;

Now, where a religious leader acquires property or make investment in his own name, the question that must be asked is; what is the source of income of the person?

We should bear in mind that, for tax purposes, all non-taxable income of the religious organisation must not enure to the benefit of an individual. It is for the organisation, simpliciter. And, any corresponding expenditure must relate to the purpose for which it was set up and approved by the CG. Therefore, where the income is to the benefit of a specific individual, that income is subject to tax unless generally exempt.

Hypothetical case

Let’s take a hypothetical illustration below to ascertain how the income of a religious leader (such as a pastor) should be taxed. The use of a pastor is by no means an attempt to limit the taxation to only churches and/or pastors. It applies to Mallams, Imams, Traditional Priest (e.g. Antoa) and the like in all fours.

In 2017, the annual income generated by a church from

  • tithes and offering amounted to US$600,000.
  • Other donations to the church amounted to US$800,000.

In course of the year, the pastor

  • bought a land cruiser, a Mercedes Benz and a House for a combined sum of US$500,000
  • bought shares in a foreign company at a cost of US$100,000

The employment income of the pastor is US$8,333.33 per month.

The pastor also travelled to the United Kingdom to preach in one of the branches of the church and received a gift equivalent of a value of US$50,000.

The pastor should be taxed as follows:

  1. The annual employment income of the pastor of US$100,000 [8,333.33*12months] is subject to employment income tax using the graduated scale. The highest rate is presently 35%.

With the above settled, the next question of interest is: what are the sources of income of the pastor that enabled him to buy the vehicles, house and shares?

  1. A tax auditor must assess whether the annual income of the pastor is enough to fund the investments he made during the year after allowing for consumption expenditure, other capital expenditure incurred and savings he might have made in the course of the year. After the investigation, the facts will speak for themselves.
  2. With the above set of facts, it is clear that the total of the monies used to buy the vehicles, house and shares exceeds the pastor’s employment income.
  3. The monies used by the pastor must have a source and must fall under one of the categories of income of an individual for which it should be subject to tax unless exempt. Thus, it may have come from
    • use of the church’s tithes and offering to his personal benefit, and
    • gifts from church members in the United Kingdom, etc.
  4. From the facts, the aggregate cost incurred by the pastor in buying the vehicle, house and shares is US$600,000 [500k+100k]. The questions begging for answers are as follows:
  • Where did the monies come from?
  • Was the income disclosed to the Ghana Revenue Authority?
  • If no, why not?

Obviously, the employment income of the pastor of US$100,000 and gift of US$50,000 couldn’t have been enough to enable him make the kind of expenditure he made during the year. The unreported (untaxed) income of the pastor can be derived as follows:

From Table 1, on the assumption that the pastor has already paid taxes in Ghana on his employment income and gift he received in the UK, he should also pay taxes on his undisclosed income of US$450,000.

It should be noted that in a situation where the assets are in the name of the church but are being used for the personal benefit of the pastor, the collateral benefit or benefit in kind should be assessed to tax in the hands of the pastor as required by law.

As already indicated, the Constitution of Ghana, 1992, the Income Tax Act, and the Holy Bible all require a pastor, as a man of God and a good citizen, to disclose his income to the Ghana Revenue Authority for an assessment to be made in compliance with law.  

Luke 11:28, “…, blessed are those hearing the word of God and keeping it."

  1. Withholding Tax

Every person in Ghana (other than an individual who is not into business) is required to withhold tax on payments to resident and non-resident persons for the supply of goods, works and services unless exempt. The withheld tax must be paid to the Ghana Revenue Authority within 15 days following the month to which the payment relates. Therefore, whenever a religious organisation makes payments for

  1. Construction and renovation of church premises
  2. Supply of goods such as books, anointing oil, etc.
  3. Provision of services such as training, or consultancy
  4. Rental of premises, etc.,

same must be subjected to withholding taxes. Failure to withhold taxes is an infringement of the law which exposes the organisation to penalties and interest surcharges.

The rate for the withholding of the taxes depends upon the nature of transaction and residency of the supplier. For domestic transactions, examples include, works (5%); goods (3%); services (7.5%); etc.

A hypothetical case

A church intends having its 20th Anniversary and the Planning Committee has outlined the following programme of expenditure and the costs are payable in the month of August 2018:

a. Renovation of the church – painting, repairs and related construction activities etc.; US$5,000

b. Purchase of anniversary T-Shirts and Clothes; US$1,000

c. Rental of the premises of a near-by School which has bigger space for reception after the programme; US$2,000

d. Catering services – procure the services of a caterer to provide food and drinks for the programme; US$1,000; and

e. photography services; US$300

What is the withholding tax obligation of the Church?

From Table 2, the explanatory notes are as follows:

  1. The renovation is considered as works. Therefore, the applicable withholding tax rate is 5%. The church is required to withhold tax of US$250 on payments to the supplier and pay same to the Ghana Revenue Authority. The net amount due to the supplier is US$4,750.
  2. The purchase of T-shirts and clothes are considered as goods. Therefore, the applicable withholding tax rate is 3%. The church is required to withhold tax of US$30 on payments to the supplier and pay same to the Ghana Revenue Authority. The net amount due to the supplier is US$970.
  3. The rental of premises for commercial purpose is considered as rent. The School is not into the business of rental of commercial premises. Therefore, the applicable withholding tax rate is 15%. The church is, therefore, required to withhold tax of US$300 on payments to the School and pay same to the Ghana Revenue Authority. The net amount due to the School is US$1,700.
  4. The procurement of food and drinks may constitute goods. Therefore, the applicable withholding tax rate is 3%. The church is required to withhold tax of US$30 on payments to the supplier and pay same to the Ghana Revenue Authority. The net amount due to the supplier is US$970.
  5. The photography services constitutes services. However, the value of the transaction is less GHS2,000 (approx.. US$420). On the assumption that this represents payment to the photographer for the whole year, the payment is exempt from tax. Therefore, the amount due the service provider is US$300

From the foregoing, the total amount payable to the Ghana Revenue Authority is US$610. The payment of the withheld tax and filing of the withholding tax return must be done by 15 September 2018.

Subsequent to the above, the current practice is that the Church will have to procure Tax Credit Certificate (TCC) from the Ghana Revenue Authority to serve as evidence of payment of provisional taxes by the suppliers or service providers. The TCCs serve as tax credits towards annual tax payable.

  1. Value Added Tax (VAT), National Health Insurance Levy (NHIL), and Ghana Education Trust Fund Levy (GETFund)

VAT is applicable on all taxable supply of goods and services provided in, and imported into Ghana unless exempt. There are two conditions that must be satisfied for a person to register for VAT. These are:

  1. The person must make taxable supplies; and
  2. The annual turnover from the taxable supply must exceed GHC200,000 or part thereof in a quarterly or monthly period.

The question is: whether or not a religious organisation is required to register for the VAT?

The answer is simple: insofar as a religious organisation satisfies the above 2 conditions, they must register and comply with the VAT Act, 2013, Act 870 (as amended).

Taxable supplies include sale of anointing oil, bottled water, consultancy services, rental of premises, training, sale of magazines, diaries, calendars, stationery, Bible, and Quran. Therefore, once the threshold for registration is met or expected to be met, it becomes mandatory for the registration to be done within 30 days.

At a glance, it may appear that most of our religious organisations whose activities fall within the above-mentioned conditions for VAT registration may not have registered with the Ghana Revenue Authority. Where such is the case, it is quite worrisome.

The VAT is at a standard rate of 12.5%.

NHIL and GETFund shall apply with the necessary modifications as may be required by law. NHIL is at a flat rate of 2.5%; GETFund is at a flat rate of 2.5%.

  1. The way forward

Flowing from the foregoing, it is imperative that there should be a paradigm shift in our deliberation on the position of the law with regards to taxation of religious organisations. I therefore recommend the following:    

  1. Education of taxpayers

It appears that a lot of Ghanaians are unaware of the position of the law. In particular, the religious organisations and their associated stakeholders who are required to pay the applicable taxes and/or comply with the law are unaware of the responsibilities they have as operating persons in Ghana. It is, therefore, important for the Ghana Revenue Authority to develop training programme to educate all charitable organisations including religious organisations to ensure full compliance with the tax laws. The programme should be segmented and tailored to meet the needs of each identifiable group for its effectiveness.

  1. Enforcement of the law

As was said by Ms Sophia Akuffo, JSC (as she then was), in the case of Atta Barfour v Tema Development Corporation, “it is a basic principle that equity aids the vigilant and not the indolent.” Therefore, where the Ghana Revenue Authority continues to sit and watch, and fail to enforce the law, it cannot put blame on the religious fraternity. Although it is trite that ignorance of the law is no excuse, it is also for the CG to ensure that all taxable persons are roped-in in the enforcement of the tax laws of Ghana. This will not only improve upon the revenue generation of the government, but will also ensure equity in the tax system.

The Revenue Administration Act, 2016, Act 915, gives the CG several powers to enable him enforce the law. These include:

  • Attachment of assets;
  • Possession of charged assets
  • Sale of charged assets
  • Restraint of individuals by acting in concert with Ghana Immigration Service to prevent travel without paying taxes due
  • Recovery from third parties
  • Appointment of receivers
  • Notification of third party debtors
  • Recovery through agents of non-residents; and
  • Recovery through the courts

Considering the enormous powers of the CG, if he fails to enforce the law, who should we blame? Your answer is as good as mine.

Similarly, Act 179, requires all Companies and Trusts to file their annual accounts (returns) with the Registrar of Companies. The accounts of a religious organisation must, among others, capture all receipts and payments for each year, and a statement of financial position of the company or trust.

The Registrar of Companies appears not to be enforcing the law. I say so because, how many of our religious organisations file their annual returns with the Registrar of Companies? Again, your answer is as good as mine.

Our government agencies must be up and doing to ensure compliance with the laws of Ghana by all. Lack of enforcement by one agency, may have a repelling effect on the other.

  1. Compliance with the law by the CG

The CG is appointed by the President in compliance with section 13(1) of the Ghana Revenue Authority Act, 2009, Act 791. The CG is, therefore, an administrative officer within the meaning of Article 23 of the Constitution, 1992. He is required by Article 23 of the Constitution 1992 to comply with the requirements imposed on him by Section 1(1) of Act 915 to administer and give effect to the tax laws of Ghana.

Failure to do so empowers citizens of Ghana the right to seek redress before a court to compel him to enforce the law. In the case of Mould v De Vine, Jiagge S. (as she then was) wrote, “There was no alternative remedy available to the applicant. She could neither sue in tort nor in contract. Yet a wrong had been done her which needed righting. The writ of mandamus is of special value in such cases where there is a legal right but no specific legal remedy for enforcing such right.”(Emphasis mine). I hope it wouldn’t take a court to compel the CG to do what he is supposed to do.

  1. Taxation of the Business and Investment Income of Religious

With reference to the holding of the Chapel Hill School Limited (Supra) case, and considering the present state of all applicable laws, the income of a religious organisation established as a Company Limited by Guarantee or a Trust with no individuals ultimately being the beneficiaries in the performance of its objects, the business profit is not subject to tax in Ghana. However, a religious organisation registered as a Trust with individuals as ultimate beneficiaries, or a Company Limited by Shares, the business profit shall be subject to tax.

Consequent upon the above, it is advisable for the CG as part of carrying its tax audit to determine the vehicle of operation of each religious organisation to form the basis of how to approach an audit.

  1. Deduction for worthwhile causes

Donation to religious organisations creates a 360 degree benefit for individuals. This is because such donations do not only benefit these organisations, but are also tax deductible for the donors in computing their chargeable income. Therefore, if we create a robust system where evidence of donations serves as a basis for deduction by individuals, it could make traceability of religious organisation income easier. Accountability, transparency and enforcement of the law may become easier as the Ghana Revenue Authority can easily corroborate information provided by taxpayers in support of filed returns.

  1. Establishment of Charity Commission

The Corporate governance in the Charity industry in Ghana appears not to be robust enough to build trust that assures all and sundry that assets of these organisations are safeguarded. There are increased calls from the public for regulation of the sector. It is, therefore, important for the government to proactively establish a body that will have the legal backing to regulate the affairs of all charitable organisations including religious organisations. In the United Kingdom, for example, they have a Charity Commission responsible for regulating the charity sector. They establish rules governing matters including

  1. Setting up of a charity;
  2. Use of charity funds
  3. Preparation of annual returns
  4. Trustees and board roles – people and skills
  5. Public benefits,
  6. Making decisions and voting
  7. Investigation of non-compliance with charity rules;
  8. Establishment of charity courts; and
  9. Sanction of persons for non-compliance

The Department of Social Development under the Ministry of Gender, Children and Social Protection does not have the power and legal backing to deal with these pertinent issues. We should, therefore, consider having similar Charity Commission established by an Act of Parliament in Ghana and tweak it to meet our needs. This will help the efforts in bringing sanity in terms of the objects of religious organisations, among others, and how they operate. Furthermore, it will go a long way to help promote a charity sector geared towards their traditional role of helping the poor and needy whilst building the spiritual life of the people. When this is done, it may make any intention of taxation of the income of religious organisations moot.

The writer is a Chartered Tax Practitioner, a Chartered Accountant, and a Student of Law.