A High Court in Kenya has stopped the nation’s revenue agency from taxing churches on the tithes and donations they receive.
Justice David Manjanja upheld a ruling of the tax Appeals Tribunal stopping the taxing authorities from demanding taxes from Thika Road Baptist Church.
The Kenya Revenue Authority (KRA) had sought Sh5.5m from the church as it failed to produce a tax exemption certificate.
Churches generally are not expected to pay taxes but must get certificate of exemption which the 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 ruling of the high court is seen as a major win for the religious institutions in the country as a KRA win was backed to help the revenue agency go after more established churches.
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.