Taxation and religion

Religious organisations are automatically considered charitable and given tax-exempt status for the “advancement of religion”. Religious groups are not subject to the same financial disclosure and probity obligations as other charities through the Australian Charities and Not-for-profits Commission (ACNC).

What’s the problem?

Generally, for an organisation to be considered a charity under the Charities Act 2013 it must be a not-for-profit entity whose purposes are charitable and for the public benefit. 

Under the Act, the purpose of “advancing religion” is automatically considered to be for the public benefit. By contrast, the purpose of protecting the natural environment, for example, is not automatically considered to be for the public benefit. Environmental groups need to demonstrate that their environmental protection purposes are actually for the public benefit in order to obtain charity status. Religious groups do not need to demonstrate that their purposes are actually for the public benefit. This is not fair.

Furthermore, most charities are subject to financial disclosure and probity obligations through the ACNC. But basic religious charities are exempt from these financial disclosure and governance obligations. This is not fair.

The tax-free status accorded church-owned multimillion-dollar commercial enterprises, such as the Seventh-Day Adventist-owned cereal maker Sanitarium, distorts the commercial market, putting competitors at an unfair disadvantage. Such enterprises should be subject to the same legal and financial laws as other commercial entities.

Tax-exempt status for charitable purposes should be accorded to institutions, religious or not, that perform charitable works benefitting the wider community. Secular measures should be applied in determining what is in the public benefit. 

Finally, it is not at all clear why, in the 21st century, the advancement of religion – ie, advancing belief in a supernatural being – should be considered a charitable action at all. The good works done by many religious organisations could secure tax exempt status via other heads of charity, such as relief of poverty, the advancement of social or community welfare.

What we're doing

We believe religious organisations should be subject to the same rules that apply to other not-for-profit organisations. 

Further, religious groups should be eligible for charitable status only if their activities are for the public benefit – which is the rule applying to charities generally.

In 2021, after media reports into allegations of the Church of Scientology shifting of wealth and assets to Australia, we called on federal Labor to push for a federal inquiry into organisations that enjoy tax-exempt status for this charitable purpose.

We are continuing to lobby federal political parties and members and senators of the parliament for reform to charity tax law.

What you can do

You can write to your local federal MP or state/territory senators, or arrange a meeting with them, to voice your support for our positions.

You can also consider helping us to make an impact by becoming a member of the Rationalist Society of Australia or making a donation.

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