Brazil’s Churches Must Now Pay a Social Security Tax. Should This Count as Persecution?

This month, Brazil’s federal revenue agency suspended a rule removing tax exemption for religious leaders, sparking controversy in the evangelical community. Reversing an interpretation issued in 2022, the Receita Federal do Brazil (RFB) suspended the rule that caused, in two years, a loss to the country around $60 million a year (300 million reais.)

Despite the RFB’s announcement saying that it is complying with a determination by the Brazil’s Federal Audit Court to suspend the rule, the court has since clarified that they have yet to make a decision on the process that evaluates whether or not to exempt religious workers’ salaries from making these contributions and that the matter is under review.

Evangelical leaders in the Senate and Chamber of Deputies were in an uproar about the measure, claiming religious persecution by the Lula government. Last week, they issued a note of rejection to the federal government for suspending this exemption:

It is actions like this that increasingly distance the Christian population from the federal government. It is very clear the attacks that are continually being made against the Christian segment through government institutions, attacking those who do not support their proposals. This is an “explicit attack” on the religious segment, an important portion of Brazilian society.

Lula’s government has defended the decision, saying that there were doubts about the legality of the exemption.

“We don’t want to harm anyone,” said finance minister Fernando Haddad, who reached out to evangelical senators and deputies for a meeting to discuss this change.

“[This 2024 change] was not a revocation nor a validation; it was a suspension. We will understand what the law says and we will comply with the law,” he said.

CT interviewed six Christian leaders and professionals and asked them to answer the following question: Can the suspension of tax exemption for religious leaders be considered religious persecution?

CT has also included an answer from an evangelical politician below.

Magno Malta, senator for the center-right Liberal Party, and pastor (This version of this answer was originally posted on X.):

Tax exemption for churches is a right provided for in the Constitution, which also extends to unions and political parties. This is not a favor from the government, but a constitutional right.

I respect Senator Carlos Vianna, president of the Evangelical Parliamentary Front [a coalition of evangelical parliamentarians from different parties], but this issue goes beyond everyday politics. Pastors are not obliged to kiss the hand of Haddad, Lula or [chief of staff] Rui Costa. Our fight is different. I spoke with senators from the Front, such as Senator Damares, Senator Jorge Seif and Senator Marcos Rogérii. They were not consulted and did not agree with the meetings mentioned in the note from the Parliamentary Front.

But everyone agreed on one point: This whole situation involving religious leaders is one more action among many others that show that the Lula government does not dialogue or have respect for Christians. He is fulfilling a campaign promise. “Put pastors in their place.”

Karine Carvalho of Recife, attorney specializing in medical, tax, and civil law:

The taxation of churches should not be interpreted as persecution. Adopting such a perspective implies that the state would be persecuting all individuals who are taxed.

It is crucial to note that the recent decision did not remove tax immunity from religious institutions but rather their tax exemption. In simple terms, this measure had exempted churches from paying certain taxes and also from reporting data, giving them the exclusive privilege of not disclosing information about their financial activities, including cash inflows, outflows, and the distribution of resources among church leaders.

The withdrawal of this benefit and the equality of religious institutions with other taxpayers recognize that these entities must also bear tax obligations toward society.

Furthermore, the suspended rule, which expanded the tax exemption on salaries of religious leaders, was created irregularly, with the FRB exceeding its authority in 2022 and interfering in an area that should be deliberated by the National Congress. Therefore, the withdrawal of this tax exemption does not constitute persecution but rather is a correction that seeks to meet two fundamental principles in our Constitution: tax equity and accountability.

We emphasize that the taxation of pastors does not constitute a moral transgression or a challenge to religious principles. On the contrary, from the Old to the New Testament, biblical precepts guide all Christians to obey the law and the authorities, which includes the obligation to pay taxes to the state.

Vitória Tavares of Recife, attorney specializing in family and consumer law:

Tax immunity is a limitation on the state’s power to tax, a guarantee provided for in the “federal” Constitution, which seeks to protect our society’s fundamental values, including freedom of religion. Therefore, religious entities are immune to taxes in general. Tax exemption is a legal exemption from paying a tax and is a privilege granted by ordinary law for fiscal, social, or economic reasons.

The withdrawal of tax exemption for religious leaders could be considered religious persecution if it was motivated by prejudice or discrimination against a particular religion or religious group.

However, in the case of the withdrawal of tax exemption for religious leaders in Brazil, which took place this month, the federal government reiterated that the measure was necessary to correct a distortion in tax legislation, since the exemption was being used improperly by some religious entities, which were paying exorbitant salaries to their leaders.

Therefore, this measure does not remove the constitutional immunity granted to churches by the federal Constitution but only removes the exemption from the collection of taxes from religious leaders previously granted by the Bolsonaro government.

Leonardo Girundi , religious freedom commission coordinator at São Paulo’s bar association, specialist in family, business and religion law:

Our federal Constitution guarantees churches tax immunity, which is a constitutional limitation on public entities in creating taxes for particular entities. This designation is distinct, therefore, from exemption, which legally exempts an entity from paying a given tax. To guarantee religious freedom, churches do not pay taxes, but pastors pay them, like any citizen.

Recently a discussion arose due to a decision issued by the RFB. The topic is related to a tax called Contribution to the Financing of Social Security (COFINS). Since 2000, churches and other religious institutions have been exempt from this contribution since Law 10,170 (which added new wording to Law 8212) determined that churches are exempt from collecting the employer’s share of this tax, maintaining the religious leader’s obligation to collect his or her own share.

It turns out that, even though this exemption was described in the law, the RFB had been generating numerous administrative proceedings to collect this tax from churches. In response to the number of administrative proceedings, the RFB clarified its position in the 2022 Interpretative Declaratory Act, simply and exclusively to help with the interpretation of the law. But recently we were surprised by a new publication issued by the RFB, which suspended this 2022 act and has generated all this controversy.

Thus, the 2022 act did not increase the exemption in relation to this specific tax (COFINS), nor did its suspension remove it. But as it was an act that interpreted the law, the risk of suspending it is that questions about this tax will still persist and that litigation will increase. Even so, I don’t see this change as religious persecution but rather as a political strategy to approach or increase revenue.

Gutierres Fernandes of São Paulo, theologian and writer:

It is absurd to treat the end of a tax privilege as religious persecution. Little by little, we are seeking the same privileges that the Catholic church enjoyed long ago in Brazil.

Unfortunately, although Protestantism invented the concept of a secular state, evangelicals, on average, think that religious equality is bad.

This negativity toward religious equality contrasts with the idea of secularism, which seeks the impartiality of the state in religious matters, thus guaranteeing freedom and equality of belief for all. Calling tax review persecution is a slap in the face of those Christians who, in history, have suffered real persecution.

Iza Vicente, city council member in Macaé, a city of 250,000 in the state of Rio de Janeiro:

As an evangelical Christian, I believe that this is not religious persecution. Our constitution continues to guarantee tax immunity for congregations of any faith, something that exists precisely to strengthen the separation between church and state and to protect the freedom of belief or religion.

Now exempting individuals from paying taxes only because they engage in religious activity would be individualizing a prerogative that belongs to the religious institution, not to its leader. Until 2022, this exemption did not exist; this tax was paid, and this was never considered religious persecution. In fact, the exemption in this case is to privilege a category to the detriment of thousands of Brazilians who annually fulfill their tax obligations, including many of them Christians. This whole situation makes me think about what Jesus said when asked about the lawfulness of paying taxes to the Roman Empire: “Give back to Caesar what is Caesars, and to God what is God’s” (Matt. 22:21).

Additionally, there is controversy because the change was issued by RFB and not through a law (as some believed it should have been). Further, the fact that this change happened two months before the presidential election suggests it might have been a move by Bolsonaro to pander to pastors.

[ This article is also available in Português. ]