ed Taxing the clergy

The long-running controversy over whether to tax the clergy appears headed toward a conclusion: where there is income, there should be taxation.

On Tuesday, a ranking Ministry of Strategy and Finance official indicated that the government has finally decided to levy taxes on priests, pastors and monks, a major policy shift from decades of tax exemption provided for religious professionals.

However, the ministry took a reverse step the following day, saying the issue has not been finalized yet, but the odds seem to be with those who argue that all citizens should pay taxes without exception. The ministry deserves applause for its latest initiative with less than two months remaining before the end of the incumbent administration.

To tax or not to tax the clergy has been raised several times but any final decision has been shelved because of a possible angry backlash from religious groups. It’s fortunate that the religious community welcomes the taxation in general, although some conservative Protestant leaders remain against it. In fact, Catholic priests have been paying income tax since 1994 and some church ministers are following suit.

Taxing the clergy is simple because it doesn’t require a lawmaking process. It’s okay if the finance ministry revises the enforcement decree of the Income Tax Law by classifying clergy income as earnings.

Clerics have been exempted from taxation here customarily amid the widespread notion that their work is not labor but a spiritual service. However, this should be changed, given the principle of equitable taxation. That is, withdrawing tax-free status from the clergy is a matter of principle beyond just collecting more taxation. And the most advanced countries in the world reportedly impose taxes on religious leaders.

Imposing taxes on the clergy can be a blessing in disguise for religious organizations in that this can serve as a valuable occasion for them to make their balance sheets cleaner and manage finances in more open and transparent ways, thereby restoring people’s trust. The tax authorities also need to tax extra for-profit businesses now being conducted by religious groups.

True, taxation won’t result in greater tax revenue because most of the nation’s 360,000 clerical officials at 90,000 religious organizations are not paid enough to pay taxes. But it can be a litmus test to gauge President-elect Park Geun-hye’s commitment to equitable taxation and legalization of the underground economy, which are desperately needed to raise funds for financing her costly welfare pledges. Given this, the finance ministry had better finalize the issue of taxing the clergy before the incumbent administration ends its five-year term in February.