Machakos Deputy Governor Francis Mwangangi has criticized the government’s proposal to tax religious leaders, calling for its abandonment due to concerns over double taxation. He emphasized that religious organizations play a crucial role in societal transformation and should not be subjected to punitive taxes.
Mwangangi argued that instead of being penalized, faith-based organizations should be recognized for their contributions to community well-being. “Taxing religious groups would be unfortunate, especially at a time when they are instrumental in fostering positive societal change,” he stated. He asserted that institutions like churches, mosques, and synagogues should be exempt from taxes due to their significant role in saving souls and supporting social harmony.
While nonprofit entities generally don’t pay taxes on net income, employees of religious organizations do pay income tax. The proposal to tax religious organizations has sparked backlash, with many leaders deeming it “ill-conceived.”
The National Treasury has introduced the Income Tax Regulations Bill (Charitable Organizations and Donations Exemptions) 2024, which targets churches and NGOs that currently enjoy tax exemptions. The bill has been endorsed by the National Assembly Committee on Delegated Legislation, leading to further outcry from religious and political leaders who believe this move undermines previous gains.
Religious leaders in Siaya County have called for public participation before any tax implementation. Archbishop Patrick Nyagudi from the Church of Christ in Africa stressed the importance of gauging public sentiment on the proposal.
He pointed out that many churches do not have substantial assets to be taxed and that their limited income is often reinvested into charitable activities. He noted that churches already submit annual returns to the Attorney General and argued against further taxation.
In January, a petition was filed in Nakuru challenging the tax exemptions for churches, claiming they contradict constitutional principles of fair tax burdens across all sectors. The petitioner, Dr. Magare Gikenyi, sought to include churches in the taxation framework, citing the need for equitable tax distribution per Article 201(b) of the Constitution.
He argued that the current exemptions create discrimination and urged the court to declare them unconstitutional. The respondents in this case include the Attorney General, the Treasury Cabinet Secretary, the Kenya Revenue Authority, the Senate, and the National Assembly, with several religious organizations listed as interested parties.
