Friday, Mar. 23, 2001. Page 1

Will Kremlin Share Taxes With Church?

By Andrei Zolotov Jr.

Staff Writer

A leading Russian Orthodox Church official this week proposed a radically new system for funding the church, suggesting the state turn over some of the money it collects in income taxes.

Metropolitan Kirill's proposal, which is known as the "German model," was seen as a trial balloon. One expert on church-state relations said the idea was first raised by the Kremlin in response to the Orthodox Church's request for a return of church property confiscated after the 1917 Russian Revolution.

In any case, the proposal underscores the Orthodox Church's lack of an economic base in society and opens up discussion of a more regulated approach to church-state relations under President Vladimir Putin.

Metropolitan Kirill, who heads the Moscow Patriarchate's department of external relations, proposed that taxpayers be allowed to designate a certain part of their income tax for a particular religious organization. All taxpayers would continue to pay the flat 13 percent.

He raised the issue Wednesday in an interview with Interfax following a meeting with Georgy Potavchenko, the presidential representative in the Central Federal District, and repeated it Thursday in a live interview with Ekho Moskvy radio.

"In no way are we talking about raising taxes," the metropolitan said on Ekho Moskvy. "We are talking about a situation in which part of income taxes would be channeled to those social programs that the taxpayer wants to support. ... If someone wants to support other religious organizations - Moslem, Buddhist, Jewish - he can do so. If he doesn't want to do so, this money will go to the state for the government's social programs. We would thus create an alternative: There should be state social programs in the society and there should be others."

The church, he said, does not have the means to fulfill society's expectations. "We are told: Why do you not go to prisons, why do you not work in rehabilitation of alcoholics and drug addicts?" the metropolitan said. "If society expects this of religious organizations, it should give its consent to the funding of these programs. I have raised this problem so that society knows about the forms and methods of financing for the social activities of religious organizations."

Before the revolution, the church had a wealth of land to support its activities and direct state funding.

Forms of funding vary widely from country to country and from church to church and are usually mixed. But they can be boiled down to four main forms: income from property, tax-deductible donations, church tax and direct government subsidies.

Traditionally, churches have turned a profit from land ownership. In one prominent case, the Trinity Church Wall Street, an Episcopal parish in New York at Wall Street and Broadway, receives rent from several skyscrapers sitting on land the church has owned since the 17th century. The money allows the parish to run worldwide charity programs.

In many countries, such as the United States, churches have tax-deductible status, which encourages private donations. In Germany, and to a lesser degree in several other European countries, the government collects taxes on behalf of the leading denominations. In Greece, the Orthodox Church is directly subsidized by the government "in exchange" for church property that was transferred to the state after the country won its independence from the Ottoman Empire.

"There is a fifth form, the Yeltsin-era one, which has completely compromised itself," said Alexander Morozov, an expert on church-state relations and a commentator for the Sobornost Internet magazine. "Under this form, the government twisted the arms of businesses such as Gazprom or Norilsk Nickel so that they simply shelled out money to the church."

Any significant church projects such as charity or reconstruction of church buildings are funded by donations from big businesses or rich Russians. Average parishioners' scarce donations and the proceeds from candle sales usually cover only operational costs such as the salaries of clergymen and choirs.

The past decade has seen a number of high-profile scandals in which the Orthodox Church engaged in trade by taking advantage of tax or customs breaks, which it received from the government on an ad-hoc basis and which derived from private relations between government and church officials. Metropolitan Kirill himself was accused in the press of trading in duty-free imports of tobacco and alcohol.

Morozov said a church tax would give the state the right to audit and control the church's notoriously nontransparent finances. The idea, he said, was first raised by the presidential administration after the church's Council of Bishops last August de facto declared the church bankrupt and asked Putin for the restitution of church property. Restitution faces strong opposition in the Kremlin for fear that other pre-revolutionary property owners may demand restitution too. Since August, the dilemma of restitution vs. tax has been discussed at several round tables of church and state officials.

"I think there is no serious intention to introduce the church tax behind Metropolitan Kirill's statements," Morozov said. "It is much more likely a sort of public relations action with the goal of attracting public attention to the problem of church financing and to his own personality. But the problem [of funding] exists and it is acute."

The metropolitan's statements have been met with much skepticism.

The Tax Ministry said it has not received any official request from the Moscow Patriarchate to assess the issue. "This is Metropolitan Kirill's private position," a spokeswoman who did not want to be named said Thursday. "If the church has an official position on this matter, it should formally apply to the State Duma, the government and Finance Ministry."

The Vedomosti newspaper quoted Galina Vafina, an official with the Finance Ministry's tax department, as saying that up to 25 percent of taxable income can be written off when filing income tax returns if the money was donated to charity.

Deputy chairman of the Duma committee on public and religious organizations Alexander Chuyev, who heads the tiny Christian-Democratic Party and is a member of the pro-Kremlin Unity faction, cautiously welcomed the idea. "Of course not today, but we will inevitably come to a church tax," he said Thursday. "It is very important to ensure that it is done on a voluntary basis, so that atheists are not forced to fund religious organizations' activities."

Mufti Nafigulla Ashirov, co-chairman of the Council of Muftis of Russia and spiritual leader of Siberia's Moslems, said that although seemingly well-intentioned, Metropolitan Kirill's proposal is potentially dangerous. It increases the state's role in regulating religious activities, he said, and can increase tensions between various religious organizations, which will compete for the funds distributed by the government. "A Moslem is supposed to donate money so that nobody knows about it," Ashirov said in a telephone interview. "In the case of Moslems, such a system will be very complicated because we don't have a strict centralized structure. Also in the case of Jews, there will be the question whether to give money to [Rabbi Adolf] Shayevich or to the rival rabbi [Berl Lazar].

"It will lead to the government's intervention into the affairs of religious organizations, which is against the Constitution and will cause a new wave of conflicts between religious organizations, not only Moslem ones."