Question Tag: Church Income

(a). The Pastoral Council of the Church of Soul Resurrection has approached you as a tax consultant for tax advice on the operations of the Church, including allowances paid to the Pastors and other Reverend Ministers. You are informed that the income of the Church is from donations, offertories and tithes from its congregants which are used towards charitable causes in the community and the upkeep of the Church. You are also informed that the Church was registered as a company limited by guarantee under the Companies Act, 1963 (Act 179) as amended.

You are required to write a memorandum (since you also double as a member of the Pastoral Council) to the Chairman of the Pastoral Council of the Church of Soul Resurrection to explain the tax implications of the income of the Church and the allowances paid to the Pastors and other Reverend Ministers. Please note that your advice should be based on the provisions of the tax laws of Ghana.

(b). Under Section 20 of the Value Added Tax Act, 2013 (Act 870), “supply of goods” means an arrangement under which the owner of goods parts with possession of the goods, by way of sale, barter, lease, transfer, exchange, gift or similar disposition; and

“supply of services” means a supply which is not a supply of goods or money, and in the nature of the performance of services for another person; the making available of a facility or advantage; or tolerating a situation or refraining from doing an activity.”

With reference to the above quotation, you are required to indicate the activities that do not constitute supply of goods or services under the Value Added Tax Act, 2013 (Act 870).