Church-run businesses must pay tax – Schlettwein

Former finance minister Calle Schlettwein says the era of "tax-free commercialism" for non-profits must end to ensure a level playing field in Namibia’s economy.

“All commercial activities should be taxed so that the tax system of the country can be just and fair,” he told Namibian Sun in an interview this week.

Schlettwein said churches, NGOs and trusts that operate profit-making ventures should no longer enjoy tax exemptions under the umbrella of their charitable status.

He argues that while tithes and offerings for spiritual work should remain untouched, the moment an institution enters the marketplace, it becomes a commercial actor and should be treated as such.

“If a church runs a bakery, they should be taxed the same way as other bakeries,” Schlettwein stated firmly.

“When they engage in taxable activities, they should be taxed. The idea should not only be debated, but it must be implemented.”

The former minister, known for his disciplined approach to fiscal policy, argued that the current tax-exemption loophole creates an environment of "unfair competition".

According to Schlettwein, a private business owner paying corporate tax, VAT and employee levies cannot compete with a church-run business that offers the same services but remains exempt from the taxman.

Economic justice

As government seeks to broaden the tax base and reduce the budget deficit, Schlettwein believes that separating "faith" from "finance" is a matter of economic justice.

When asked to respond this week, finance spokesperson Wilson Ashikoto admitted that the idea “has been parked” for now.

“There are currently no discussions around it,” he confirmed.

The spokesperson’s comments suggest a lack of political appetite to tackle the influential religious lobby, especially as the country navigates a complex socio-economic landscape.

Many church leaders have previously argued that the profits from their business arms are funnelled back into community outreach and poverty alleviation programmes, which they claim justifies their tax-exempt status.

Despite the ministry’s current hesitation, Schlettwein’s remarks have reopened a door that many in the private sector have been knocking on for years.

Small business owners often complain that "charity-owned" enterprises undercut market prices because they lack the overhead of tax compliance.

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