Freethinkers say: Revoke their tax exemptions
The other day, I discovered a group called the Filipino Freethinkers, and heard of a novel, strategic but untested way of enforcing the separation of Church and State.
I spoke at a forum of the UP Third World Studies Center titled “Of Churlish Churches and a Sanctimonious State: Will There Ever Be a State of Grace?” My fellow speaker was professor Lydia N. Yu Jose of the Ateneo University, and our chair was professor Rolando Fernando of UP Diliman. I knew I had to accept the invitation as soon as I saw the forum’s title, if only to honor its wit and mischief.
But I also wanted to pay homage to the TWSC itself, first established in the mid-1970s, at the height of martial law repression, and where then College of Arts and Sciences dean Dodong Nemenzo and the TWSC’s first director, a young sociology professor named Randy David, carved out an intellectual sanctuary for critical thinkers on campus, while the rest of the nation was marching to the Bagong Lipunan song. Now under the leadership of the next generation of scholars, it has launched a Public Forum Series (“Churlish Churches” is the first in the series) under its new director, professor Ma. Ela L. Atienza of Diliman’s Political Science Department, with the support of UP assistant vice president for public affairs, English professor Jose Wendell P. Capili.
The lectures were followed by a robust exchange with the audience, and it was then that I stumbled upon the Filipino Freethinkers. Their website says: “Freethought is a way of thinking unconstrained by dogma, authority, and tradition. To a freethinker, no idea is sacred; all truth claims are subject to skepticism, rational inquiry, and empirical testing.” Their spokesman was a young man named Red Tani, and he presented a simple but strategic mode of advancing the principle of Church-State separation: Ordinary citizens should file cases to revoke the tax exemptions of religious groups that take part in political activities. And he even came in armed with a Supreme Court decision!
The Constitution proclaims the principle that the “separation of Church and State shall be inviolable.” It carries out that principle in more detail: “Charitable institutions, churches and parsonages or convents appurtenant thereto, mosques, non-profit cemeteries, and all lands, buildings, and improvements, actually, directly and exclusively used for religious, charitable or educational purposes shall be exempt from taxation.” The Supreme Court has further narrowed the scope of this tax exemption.
In the case cited by Tani, the Lung Center of the Philippines claimed exemption from real property tax under the Local Government Code. The Court held that the Lung Center was indeed a charitable institution, but its rental income collected from concessionaires on its property was taxable because the leased portions of its property was thus “not actually, directly and exclusively used for charitable purposes.” Tax exemptions are construed strictly against the taxpayer (“strictissimi juris”) and liberally in favor of the taxing power.
I have found a parallel case involving the Young Men’s Christian Association, this time involving exemption from income taxes, where the Court similarly held that the YMCA was indeed a non-profit institution dedicated to “religious, educational and charitable objectives” but which was nonetheless subject to income tax on its rental earnings collected from canteen and parking lot operators.
Both cases cited Chief Justice Hilario G. Davide Jr., one of the drafters of the 1987 Constitution, who said that it is not the institution itself that is exempted but its properties that are “actually, directly and exclusively used for religious, charitable or educational purposes.” In the Lung Center case, the Court clarified that the test is the actual use of the property, not how the income derived is subsequently used. In other words, it will not suffice that the Lung Center plowed back its rental income into the charity wards.
The Freethinkers argue that religious groups that engage in secular politics should similarly be deemed to lose their tax-exemptions when they engage in secular politics. Otherwise, these religious groups enjoy a hidden subsidy from the Filipino taxpayer. The Freethinkers argue: “If they want to continue their pulpit politicking, they must register as a political institution and pay their dues. Otherwise, they’re just evading taxes. What’s worse, this illegal politicking is funded indirectly by every Filipino—whether they agree with [these groups’] politics or not.”
I do not know how much revenue is at stake here. Maybe for the taxman, this debate is too much political trouble in exchange for too small a peso increment. But the Freethinkers’ proposal would shift the burden to these religious groups to explain why—despite their engagement in secular politics—they can call themselves tax-exempt organizations and why—if, say, their building is used for a training or symposium opposing the reproductive health bill—they can still claim that the property was nonetheless “exclusively used” for tax exempt purposes.
There is actually a more difficult issue here, that of drawing the line that separates the “exclusively religious” from the mass of social advocacies adopted by various churches in the Philippines. Although that debate is way beyond the ken of most of legal discourse, and law is often too blunt an intellectual instrument to provide the answers, the genius of the Freethinkers’ initiative is that it surfaces for all to see the true nature of the tax exemption as a hidden subsidy by taxpayers for causes chosen by unelected powers not beholden to the sovereign Filipino people.