RELIGIOUS INSTITUTIONS' INVOLVEMENT IN COMMERCIAL INTERESTS

RELIGIOUS INSTITUTIONS' INVOLVEMENT IN COMMERCIAL INTERESTS

31.

Mr Calvin Cheng asked the Minister for Community Development, Youth and Sports given the recent announcements of mega churches being involved in property investment and development, what regulations will be put in place to ensure that religious institutions do not abuse their charitable status to dabble in commercial interests.

Dr Vivian Balakrishnan: The activities of a registered charity must be consistent with its charitable cause. These may include the advancement of religion, education, relief of poverty, and other purposes beneficial to the community. Consequently, registered charities are exempted from income tax.

Charities with large reserves or endowment funds should not be precluded from investing their funds to generate returns, so that they can do more for their charitable causes in the future. Some charities have invested in financial instruments like fixed deposits, equities and bonds. The boards of charities are ultimately accountable and responsible for all investment decisions. They would have to fully take into account the potential risks and returns, and not expose the charities to unacceptable risk.

Charities should set up subsidiary companies to carry out commercial activities which are not directly related to their primary charitable purposes. They must ensure transparency and not be distracted from their core charitable purposes. These subsidiary companies, like any other commercial companies, are subject to normal corporate income tax. They do not enjoy the tax-exempt status of charities. Religious organisations are treated no differently from any other registered charities.

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