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The Philippine Government Should Impose Tax on the Catholic Church in the Philippines

Requirement for tax




Government to tax the Catholic church in the Philippines?

Does the Philippine government have the right to tax the Catholic church in the Philippines?

Yes, the Philippine government has the right to tax the Catholic church.

That is, on certain activities or items.


One exception: sale of the bible, or the sale of stampita, provided it is not for the purpose of gaining profit.

Imposition of tax “would impair the constitutional guarantee of the freedom of exercise and enjoyment of religious profession and worship (De Leon, H. H. Textbook on the Philippine Constitution. 1999:88).

Likewise, the government may not impose tax on the fees of any citizen who attends a seminar on the bible.

Tuition fees can be taxed

How about on the tuition fees of students who enroll at the University of Santo. Tomas (UST) to take up law? (To be fair, let us mention Ateneo de Manila University, La Salle Universty, San Beda University, Christian University, St. Scholastica, College of St. Benilde and more. This list is not exhaustive.)

UST was established by the Dominican order of the Catholic church in 1611. That is, during the Spanish colonial era when the state and church were one. UST offers other courses like doctor of medicine, nursing, accounting, and conservatory of music.

So not all the courses in UST are for the sole furtherance of religious belief.

Suppose the Bureau of Internal Revenue (BIR) were to charge tax on the tuition fees of some 100 students of law? Each student in the first year may be required to enroll about 23 units in the first semester and pay at least Php 1000 per unit. That is, a student pays a tuition fee of at least Php 23,000 so that 100 students would pay Php 2,300,000. Suppose the tax is 3%, the tax due the government would be Php 69,000.

Will UST pay the tax? No.

UST will say, UST is exempted from paying taxes to the government because of the separation of the church and state, claiming that it is part of the Catholic church. UST and other Catholic universities, colleges, high schools, and kindergartens have not been paying taxes.

Bases of taxation

Suppose the BIR will become insistent? What is the basis of the BIR in imposing taxes on such income by the Catholic church entities?

The legal basis is the corporation law. The Catholic church is registered as a foreign corporation in the Philippines. Corporations, Philippine or foreign or partly owned by Filipinos and foreign investors are required to pay taxes.

Tax evasion

In practice, the Philippine government is not charging taxes on the Catholic church in running business enterprises like universities, colleges, and lower institutions of learning, hospitals and banks.

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The reasons for not charging taxes are: (1) separation of the church and state, (2) the officials of the government especially the elective ones are afraid to touch the Catholic church, (3) ignorance of the provisions of the constitution.

The fear by politicians of the Catholic church emanates from the Catholic vote. This church can endorse candidates for elective positions and can censure candidates as well. In the recent national elections held in May this year, a lot of candidates won owing to the endorsement by the Catholic church .

Reason number 1 is owing to a misplaced interpretation of the separation of the state and church.

The preamble of the present constitution ratified on February 11,1987 contains the term “Almighty God” but it does not say god of the Catholic church. In the 1973 constitution that preceded it, the term used was “Divine Providence.” Whether the term is “Almighty God” or “Divine Providence” the preamble does not specify Jesus Christ, or Mohammed, or Confucius, or Buddha. That is, the preamble does not favor the Catholic church or any other religion. It can be one of those mentioned or all of them plus the anitos, the gods of the native Filipinos.

Besides, the preamble is not part of the constitution. That is true of other written constitutions in other countries. The preamble states who are the authors of the constitution, the Filipinos in the case of the constitution of the Philippines. The preamble also states the purposes of the constitution, like creation of a democratic republic.

Reason number 2 is owing to political expediency. Reason number 3 is owing to incompetence.

Suppose there is a Chief Commissioner of the BIR who believes in the separation of the church and state, unscared of political reprisal from the Catholic vote and who is competent? S/he will impose taxes on UST income from the tuition fees of law students, for example.

What might UST do? It might go to the Supreme Court (SC) of the Philippines and file an injunction to nullify the BIR memorandum of tax collection.

It is more likely than not that the SC will rule that the BIR cannot impose taxes on UST for this income because there is no statute that requires religious organizations to do so. The UST could be right in finding a niche in the statutes. That is, it might contend that the corporation statute is not enough and the SC concurs. (Statute means enactment by Congress and president, not a provision of the constitution).

What would the BIR do? It sees that the income of schools run by the Catholic church is a substantial one. This income constitutes a drain in the economy of the country because the Catholic church is remitting funds to the Vatican. Enrollment in a Catholic school in this country is the most expensive way of attaining education. It is a status symbol for the oligarchs.

Tax legislation

Suppose the BIR asks the Philippine congress to pass a legislation that covers all religious organizations to impose tax on items and activities that are for profit?

Suppose members of the House of Representative, about 200 of them, and the senators, 24 of them, believe in the separation of the church and state, are not scared of the Catholic vote and are competent? Then they would pass a legislation to impose tax on any and all religious organizations on their activities or business run for profit. That is, they would not specify the Catholic church as that would be a special law and unconstitutional.

Let us suppose the President of the Philippines, being cognizant of the separation of church and state, not scared of the Catholic vote and competent would sign the bill into law. Let us call this law “Taxation on Non-religious activities and items" or TNRAI.

What might the Catholic church do, this time the Catholic Bishops Business Conference of the Philippines (CBCP) that appears to be in charge of temporal governance of the Catholic church in the Philippines?

Run to the Supreme Court

The CBCP might file a case in the Supreme Court charging that the law (TNRAI) imposing tax on for-profit activities and items of any religious organization is unconstitutional. The respondents will be Philippine Congress and the Presidency.

Suppose TNRAI is the first statute in the Philippines and has no precedent in written law?

What might be the argument of CBCP? It might argue that in the long past no tax has been imposed on for-profit activities and items of any religious organization, especially on the Catholic church.

Unacceptable argument

The church cannot argue its case with the use of common law because there has been no precedent in common laws of the Philippines on such matters. The Catholic church cannot invoke the Philippine constitution because this constitution does not have such a provision. ("Church" means any faith).

“…The Constitution, in Section 5, does not, however, prohibit imposing a tax on the sale of religious materials by a religious organization. Such tax, unlike a license fee, does not restrain in advance the exercise of religious freedom. It is generally applicable to all, and imposed after the activity taxed is completed, and the fact that the activity is conducted by a religious sect is only incidental” (De Leon, H.S. Textbook on Philippine Constitution. 1999:89).

Article VI, Section 28, provides that “Our constitution and laws exempt from taxation, properties devoted exclusively to religious purposes.”

Article II, Section 6 reads as follows:

"Sec. 6. The separation of Church and State shall be inviolable."

Furthermore, "no law shall be made respecting an establishment of religion."

Nowhere in the constitution can you find a provision or statement that says that one religion or another is exempted from paying taxes on activities or items sold for profit.

The teaching of law or medicine is not exclusively for religious purposes.

The investments of the Catholic church in San Miquel Corporation, Philex, and mining industry are not for religious purposes. They are for profit because these corporations are for profit.


What is the framework or assumption of the Supreme Court making a ruling on the supposed case filed by the CBCP charging that TNRAI is unconstitutional?

The assumption is: that the Supreme Court has the power of constitutional review. The Philippine constitution gives that constitutional review to the Supreme Court.

In other words, the Supreme Court has the power to rule whether a legislation (bill passed by Congress and signed into law by the president) is constitutional or not.

Suppose the Supreme Court ruled that TNRAI is unconstitutional?

CBCP might be happy being the winner in the case; the Catholic church might be happy.

CBCP lost the debate with Congress and the president but it won the debate with the Supreme Court. That is an invaluable lesson. Do not argue with Congress or the president during the development of a statute. Argue it with the Supreme Court. That is much easier.

However, we must pursue the case further. Suppose, in the views of Congress and the president the Supreme Court erred in its ruling?

Supreme Court cannot be compelled to reconsider

Congress and the president might file a petition for reconsideration of the SC ruling - with the SC.

Suppose the Supreme Court will stick to its ruling and not reverse it?

This is the present practice in the Philippines, the Supreme Court sticking to a ruling that appears erroneous .

Congress or the president cannot compel the Supreme Court to reconsider much less reverse its ruling. This is the present practice in the Philippines.

Do we see any defect or flaw here?

Congress can overrule the president, that is overrule the president’s veto, with two-thirds votes by the House or Representative and by the Senate.

But Congress or the president cannot overrule the Supreme Court. This is the present practice in the Philippines.

Who is more powerful, Congress composed of the representatives of the people or the Supreme Court composed of 15 justices not elected by the people? Is it a republic of the representatives of the people or of the justices of the Supreme Court?

What is the remedy to a possible and probable tyranny of the Supreme Court?

We will not use violence as our constitution renounces the use or war. However, it does not rule out the right to revolt on the part of citizens.

The remedy is: remove the power of constitutional review from the Supreme Court.

Constitutional review is not the reason for being of any republic. There are countries in the world without the power or constitutional review. For example, Italy, Ireland and Switzerland. And they are stable.

As of now, it may be difficult to remove constitutional review by either legislation or by amendment in the Philippine constitution. For one, the Catholic church will be against it. For another, this subject is difficult to explain to the citizenry.

Our constitution is largely patterned after that of the United States which has a provision of constitutional review. This device might work for the US but not for the Philippines as being demonstrated by events.

The consequences of power of constitutional review can be demonstrated in a lot of events that had already happened in the Philippines. For example, Congress proclaimed 16 towns into citihood in 2010. The League of Cities of the Philippines filed a petition with the SC charging that the proclamation was unconstitutional. The SC reversed the proclamation by Congress. The towns seeking citihood filed a petition with the SC for a reconsideration of the SC recent ruling. Two justices abstained in the voting; more justices voted for the retention of proclamation by Congress of the citihood of the 16 towns in 2011. That is, the Supreme Court admitted errors and reversed its ruling.

The pain in the neck is that the Supreme Court can choose not to admit error and reverse its ruling. If it were a game in basketball, the referee stood pat on an obvious error in ruling a foul on a play that is legitimate in the eyes of the players, coaches, team owners, and sports fans.

CBCP petition against the RH Law

Now, the CBCP has filed a case with the Supreme Court charging that the Reproductive Health Law is unconstitutional. This law is supposed to be in force three months ago but the Supreme Court ordered abeyance for three months due to the petition filed by the CBCP. The Supreme Court had an en banc session on the CBCP petition two days ago but has not yet come up with a decision.

The case of the Reproductive Health Law is a test on the power of the Catholic Church, Congress, Supreme Court and the Presidency. It will show if Congress is the ultimate lawmaker in this country. If the president vetoed the RH Law, Congress could pass it by virtue of two-third vote of the House of Representative and two-third vote of the Senate. The signature of the president would not be needed for it to become a statute.

If the RH Law were ruled as unconstitutional, it would show that the Catholic church is the ultimate lawmaker of this country. That would be a travesty of Philippine congress.

All because of the power of constitutional review bestowed on the Supreme Court.

(I have another Hub on this topic, "Judicial review on constitutionality by the Supreme Court in the Philippines and USA reconsidered").

The Supreme Court can still be given the power to give its legal opinion as to the constitutionality of a statute. That would be useful to Congress and the president. However, the legal opinion on constitutionality should not be executory. For example, its judicial review on TRNAI does not nullify it if it finds it unconstitutional.

How to ensure that Congress makes constitutional statutes is another matter that we will not tackle here.

New entries as of Feb. 18,2015

Last year the Supreme Court ruled that the Reproductive Health Law is "not unconstitutional."

Still the Catholic church does not agree with this ruling. Some bishops, members of the Catholic Bishop Conference of the Philippines. have joined the National Transformation Council (NTC) that is calling for the resignation of Pres. Aquino III. At the same time NTC is organizing and running a clerico-political structure as an alternative to the present government. It is gathering people power in the countryside that will soon be used to lay siege on Pres. Aquino III. The Catholic church is the rightist rebel in the Philippines today. NTC have held assemblies in Lipa City (August 2014); Butuan city (Dec. 2014)p; Angeles City (Dec, 2014); Cebu City (Dec. 2014); and Davao City (Dec. 2014). I have three Hubs on this topic.]

Enough bases

There are enough bases for the imposition of tax on for-profit activities and items and not for the furtherance of belief of the Catholic church or any other religion. These are found in the constitution and the corporation law.

Taxation of the Catholic church in the Philippines


Tina Siuagan from Rizal, Philippines on May 29, 2018:

I am born and raised Catholic though currently finding my way to becoming the genuine Baptist Christian that I could be. Notwithstanding my religious beliefs and high reverence to God, I am inclined to agree with this hub of yours, Sir Conrado. Indeed, not just the Catholic Church, but churches and/or religious corporations and/or associations must and can be taxed.

Thank you for pointing out that these entities are not just out there propagating the word of God and salvation. Just like other corporate entities, they too are performing activities that are not within the realms of practice of their freedom of faith or worship and are otherwise taxable.

I can only hope that if this happens, a more equitable imposition of tax can be employed so as to place all churches and/or religious corporations in somehow relatively equal footing.

I am looking forward to reading more of your hubs, Sir. God bless and more power to you!

conradofontanilla (author) from Philippines on February 18, 2015:

Brian Dela Masa,

I know of none. Besides, the Catholic church would not give any figure. It does not report any income to the Securities and Exchange Commission. Neither to the Bureau of Internal Revenue. I surmise that the Catholic church is taking out money from the Philippines much more than the remittances by overseas Filipino workers.

One kind of study of alms would be to count churchgoers at least every Sunday and assume that each churchgoer gives one peso of alms. Alms and donations are confidential.

Brian Dela Masa from Pasig on February 18, 2015:

I enjoyed your article. Are there any local formal studies regarding donations and alms given to the church and how much is used in charities?

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