A High Court in Kenya has stopped the nation’s revenue agency from demanding taxes from churches on the tithes, offerings and donations they receive without exemptions.
Justice David Manjanja upheld a ruling of the tax Appeals Tribunal, stopping the taxing authorities from demanding taxes from Thika Road Baptist Church.
The taxman wanted the church to pay Sh5.5 million, arguing that it failed to produce a tax exemption certificate.
Churches generally are not expected to pay taxes but must get certificate of exemption which the Kenya Revenue Authority (KRA) said is compulsory.
“I, therefore, find and hold that since tithes, offering and freewill donations are not income chargeable with income tax, it was not necessary for the church to seek an exemption,” Justice Majanja said.
The judge said the KRA could not convince the court that tithes and donations could be considered profits or rights granted for use of properties or any other form of recognised income by the Income Tax Act (ITA).