RSA calls for action on ‘advancing religion’ tax exemption as part of needed reform

Si Gladman / 27 September 2022

The Rationalist Society of Australia has urged the Albanese government to tackle reform of the charities tax system and the automatic exemption status for entities claiming to be religious, with action needed to ensure the integrity of the system.

In a letter to Assistant Minister for Competition, Charities and Treasury, Andrew Leigh, earlier this month, the RSA pointed to numerous media articles from recent years about taxation scandals involving religious organisations.

As Labor spokesperson for charities last year, Dr Leigh (pictured) raised concerns about the Church of Scientology’s alleged practice of shifting wealth and assets to Australia, where it enjoys tax concessions.

RSA president Dr Meredith Doig told Dr Leigh that, as the responsible minister for the charity sector and the Australian Charities and Not-for-profits Commission, he now had an opportunity to “pursue much-needed and long-overdue reform in this area”.

“Subsequent allegations of tax evasion involving other religious organisations, such as the Mormon Church and Hillsong, add further urgency to our call for action on this matter,” said Dr Doig.

After Dr Leigh last year called for a parliamentary inquiry into the Church of Scientology, the RSA urged him to pursue an inquiry into the tax-exempt status for the ‘advancement of religion’ under the Charities Act 2013.

In her latest letter, Dr Doig said that, as events over the last few years had shown, it was not clear that organisations that ‘advance religion’ necessarily contributed a benefit to the public.

She noted that numerous media reports had detailed personal stories of survivors who suffered harm inflicted by religious organisations, such as those excommunicated and shunned by Jehovah’s Witnesses

She told Dr Leigh that there was public interest in having an inquiry into the operation and scope of the tax exemption for entities claiming to be religious, saying such an inquiry should consider:

  • whether it would be appropriate to remove the ‘advancement of religion’ from the charity subtypes under the Act;
  • whether any commercial operations should be eligible for this exemption;
  • whether there should be a requirement that religious organisations demonstrate public benefit – as exists in the United Kingdom – rather than this being automatically presumed;
  • whether exemptions from financial reporting to the Australian Charities and Not-for-profits Commission for ‘basic religious charities’ remain appropriate.

“We believe all organisations that enjoy tax-exempt status should be obliged to demonstrate that their activities are in the public benefit,” she said.

“…even if the ‘advancement of religion’ head of charity were to be removed, religious charities that do genuine work in the public benefit – of which there would be many – would continue to qualify for charity status under another head of charity, such as ‘relief of poverty’ or ‘advancement of community welfare’.

She said there was a great public desire for the government to assure the integrity and accountability of our public systems and institutions, including the integrity of the charity tax system.

This issue is one of our top four priorities for secular change that we want to see during the term of the new federal parliament.

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Si Gladman is Campaigns & Communications Coordinator at the Rationalist Society of Australia. You can contact him at sigladman@rationalist.com.au or follow him on Twitter at @si_gladman

Image: Andrew Leigh MP (Facebook)

All the more reason.