Financing churches with Ukrainians' taxes – what are the prospects?

Ukrainians will finance the OCU and UGCC? Photo: UOJ

Ukrainian MP Mykyta Poturaev, known for his antipathy toward the UOC, has proposed financing religious organizations through tax mechanisms.

“The idea is to allow Ukrainian citizens to support, through their taxes, those religious organizations they consider worthy. This is a model that is widely used across Europe,” Poturaev stated.

At first glance, the idea may seem attractive. However, in Ukrainian realities it carries very significant risks.

European models of church financing

These models generally fall into four categories:

1. A church tax for members of specific religious communities;
2. Taxpayers choose a recipient from a state-approved list;
3. Direct budgetary support for clergy;
4. No tax-based financing mechanism.

1. Church tax or contribution for members of specific religious communities

The best-known example is Germany. There, the church tax, Kirchensteuer, is paid not by all citizens but only by members of officially recognized religious organizations. In most federal states, the rate amounts to 9% of the assessed income tax.

With an average annual gross salary of around €53.8 thousand, this amounts to approximately €640–900 per year.

The financing scheme works as follows: a person officially declares to both the employer and government authorities his or her affiliation with a particular denomination. The employer withholds the church tax together with income tax. Tax authorities collect the funds and transfer them to the corresponding religious organization, retaining an administrative fee.

It is important to understand that the taxpayer cannot designate a specific parish or monastery. The funds go to the religious organization as a whole, which then distributes them according to its own internal rules.

Interestingly, the Local Orthodox Churches registered in Germany generally rely on donations rather than collecting church tax from their faithful, even though they are entitled to do so.

The main reason is the absence of a tradition of rigid formal membership and the financial and other obligations associated with it.

Similar systems exist in Austria, Denmark, Sweden, and other countries.

Finland also belongs to this group, but with one notable distinction: believers register not as members of a denomination but as members of a specific parish, which then receives their church tax.

2. Taxpayers choose a recipient from a state-approved list

In this model, the church tax is not an additional levy on top of income tax. Instead, it is a percentage of the income tax itself that the taxpayer may allocate to a religious organization.

For example, Italy operates the otto per mille system – “eight per thousand,” or 0.8% of income tax. In absolute terms, this amounts to only several dozen euros per person, but collectively it generates millions of euros, most of which go to the Catholic Church.

If a taxpayer indicates which religious organization should receive the funds, that organization receives them. If no choice is made, the money is distributed proportionally according to the preferences of those who did make a selection.

Spain has a similar model, though with its own characteristics. Taxpayers may direct 0.7% of their income tax either to the Catholic Church or to social causes. They may choose both options or neither. However, they have no influence over the specific allocation of the funds. Distribution is handled either by the Catholic Church or by the state. Comparable allocation models operate in Hungary and Romania.

3. Direct budgetary support for clergy

The clearest example is Greece. The state directly finances the Church of Greece from the national budget, including the payment of clergy salaries. For example, approximately €200 million was spent for this purpose in 2023.

Under this model, taxpayers have no influence whatsoever over the allocation of their taxes. They simply pay mandatory taxes into the state budget.

A similar system exists in Belgium, where the state finances officially recognized religions. Norway also follows a comparable approach, with the Lutheran Church of Norway receiving the bulk of funding, while registered religious and philosophical communities may apply for state grants.

4. No Tax-Based Financing Mechanism

France, the Netherlands, and a number of other countries do not have a church tax or any other mechanism for regular tax-based financing of religious organizations. Religious communities are supported primarily through donations, the use of their own property, internal collections, and similar means. At the same time, the state or municipalities may provide funding for social projects, the restoration of historic buildings, and related activities.

None of these models is perfect. Even in Europe, their substantial shortcomings are openly acknowledged.

Drawbacks of state financing for religious organizations

Formalization of Religious Affiliation

Faith becomes a tax status.

A person cannot remain a believer while refusing to pay the church tax. For example, the Catholic Church in Germany explicitly states that one cannot leave only the “church corporation” while retaining full membership in the Church’s “spiritual community.” In practice, the message becomes something like: either pay, or you are no longer Catholic.

This may be one of the reasons why in Germany annually more than three hundred thousand Catholics officially leave the church.

The reverse side of this phenomenon is that often a person who has paid church tax considers participation in worship and community life to be already unnecessary.

Dependence on state structures

"He who pays the piper calls the tune." This applies to a certain extent in church-state relations as well. Churches receiving money from the state often cannot afford to contradict generally accepted state ideology. In Europe, this is support for LGBT and other phenomena that churches consider incompatible with Christian doctrine. Churches are forced to either remain silent or acknowledge Scripture as outdated and correct its norms.

Discrimination against unregistered religious organizations

In many European countries, procedures for registering religious organizations are too cumbersome and bureaucratized. Often religious organizations are denied registration for unclear reasons. In some countries, to receive financing, one needs to conclude separate agreements with the state in addition to registration. As a result, only a few churches receive financing, which carries risks of violating the principle of non-discrimination. Even the European Court of Human Rights has pointed to this circumstance.

Non-transparent distribution of funds

Since churches distribute money received from the state budget at their discretion, there is a risk of non-transparency or some distortions. Within churches, dependence arises of those clerics who receive money on those who influence their distribution. All this can negatively affect both the atmosphere within the church and its external image.

What this would mean for Ukraine

Now let's return to Poturaev's proposal. In Ukrainian realities, such a model would inevitably become a field for abuse. And here's why.

First, it will not be believers but the state who decides which religious organization is "worthy" of taxpayer money and which is not. And the selection criterion will not be historicity, canonicity, numerousness and other such aspects at all. Such a criterion will be loyalty to the state. Actually, N. Poturaev said so directly: financing will be received by "necessary" churches, which he classified as OCU and UGCC.

Second, Ukraine's most numerous denomination, the UOC, will almost certainly be left without financing. The State Service for Ethnic Policy and Freedom of Conscience recognized it as affiliated with the ROC and filed a lawsuit to ban its activities.

Third,

the tax mechanism will be used to stimulate transitions to the OCU. Financial pressure will be added to fake assemblies, illegal re-registrations and forcible seizures.

Fourth, any church tax model presupposes a person's declaration of which denomination they belong to. And if a person chose the "wrong" Church, the state will know about it and draw conclusions.

Fifth, such a system is a wide field for corruption. The fact that money will be distributed according to internal decisions of the churches themselves, in Ukrainian conditions will very likely mean kickbacks, abuse and other forms of "budget development."

Sixth, churches will fall into strict dependence on the state. And considering that our state does not shy away from interfering in the internal affairs of churches, this will mean that authorities will demand they fulfill their wishes. For example, V. Elensky has already expressed confidence that the All-Ukrainian Council of Churches will treat with understanding the need to introduce LGBT agenda in Ukraine.

Conclusion

In Europe, the model of financing religious organizations through tax mechanisms was formed as a result of a long history of church-state relations. It exists under conditions of democracy, rule of law, independence of the judicial system. In Ukraine, however, such a model is proposed to be established against the backdrop of church confrontation, legislative, media and forceful pressure on one of the denominations, disregard for rights and freedoms, supremacy not of law but of political expediency.

Therefore, in our country such a model will serve not so much to support religious organizations as for corruption and financing church conflict.

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