A “sin tax” is meant to penalise and prevent undesired behaviour, like alcohol and tobacco taxes. So it’s ironic that some people have used the current debate about charities and business income to advocate for taxing religion.
There’s been plenty of discussion about whether charities that also run businesses should pay tax on their commercial income, but this issue is different. The New Zealand Association of Rationalists and Humanists recently argued that “advancement of religion” shouldn’t be treated as a charitable purpose any more, meaning religious organisations would lose associated tax advantages. This is doubly ironic, for reasons we’ll get to later.
For now, let’s note this just looks like plain opposition to religion. It also reflects a common failure to understand why, as a society, we might value religion.
Simply put, religion is a personal and social good and we should treat it as such. This is a large topic, but here are four brief reasons to agree.
First, religion is an integral part of being of being human. School children learn about the importance of hauora and the Māori health model Te Whare Tapa Whā, which teaches that the four pillars of wellbeing include taha wairua or spiritual wellbeing.
Being able to search for meaning and order our lives in accordance with what we find is part of what makes us whole and healthy moral agents. It would be odd to teach our children that this matters while simultaneously stripping it out of our charities law.
Second, religion can operate as a check and a balance against other institutions, like government, that can otherwise concentrate and abuse power.
Andrew Walker, an associate professor of Christian ethics, puts it like this: “mediating institutions—such as churches, schools, and community organizations—are able to form people’s deepest convictions ... Without these institutions, the state becomes the primary source of moral authority, leading to an erosion of personal freedoms”.
Loyalty to non-political institutions, particularly the kind of deep yet freely-chosen allegiance that religion develops, help to prevent the state exercising outsized influence over our personal and social decisions.
Third, religion creates obvious social goods. Associate Professor Juliet Chevalier-Watts, an atheist, has highlighted the “enormous” contribution of religious charities to our national life, for example through foodbanks, addiction services, housing, and education. She quantified this as worth “$6.1 billion to New Zealand in 2018 alone”, more “than entire industries such as commercial fishing and forestry combined.”
Critics might argue we can simply give tax breaks to those activities and leave religion out of it. But that overlooks an important fact—religion of the alms-giving, love-your-neighbour variety is the reason those desirable activities exist in the first place. You won’t get the fruits if you cut off the roots.
Fourth, New Zealand’s specific religious heritage has brought significant benefits that we take for granted. While we think this is obvious, the historian Tom Holland has shown that it was far from self-evident in the past.
Citizens of the Roman empire would have been astonished by the idea that slaves had the same dignity as their masters or that women were of equal status to men, at least until Christianity revolutionised the empire with its commitment to the equal value of all humans regardless of sex, race, class or caste. That commitment is the foundation of our modern adherence to human rights.
But aren’t religions involved in war, suffering, and evil? Sometimes they are, and religious believers should be the first to acknowledge when harm is done, to repent, and to make restitution wherever possible.
But this is a human problem rather than a religious one, as a quick glance at the twentieth century demonstrates.
Stalin’s avowedly atheistic regime, to name just one example, caused death and destruction on an enormous scale, but that doesn’t mean atheist advocacy should be denied charitable status as a result.
On that note, let’s return to the extra irony mentioned earlier. The NZ Association of Rationalists and Humanists argues that giving religion a tax break “compels taxpayers with no religion to be ‘vicarious donors’ to religious organisations they do not support and works as an indirect tithe on non-religious taxpayers”.
Yet the Association is a registered charity receiving tax breaks to support its gospel of secularism. It’s hard to see why they should get a “tithe” to support their beliefs while religions lose support for their beliefs.
In fact, I have no problem with the Association getting tax breaks. I’d just like to see them be logically consistent.
A mature society accepts that asking ultimate questions, and supporting the human desire to seek meaning and truth, is a good thing even if we don’t agree on the answers.
Whatever else that may be, it’s certainly not a sin.
This article was first published by The Post, the Waikato Times, and The Press on 29 April 2025 under the heading “Why religion should still be spared taxation”.
