Expats living in Germany might soon find the pressure growing to nominate a religion on their tax form so as to help boost the churches’ flagging financial fortunes. As Andrew McCathie reports, Germany’s Protestant and Catholic churches have fallen on hard times.
Once among the richest churches in the world, Germany’s Protestants and Roman Catholics have fallen on hard times as the grim state of the nation’s economy plays havoc with their previously lavish finances.
With their funds drying up and the number of churchgoers falling dramatically, the talk in the German Protestant and Catholic hierarchies these days is about possibly winding back their once sprawling empires of schools, kindergartens, charity work and social services as well as cutting jobs.
Moreover, with the lines of pews in many churches now half full, fewer clergymen and the merging of parishes, church leaders have also been sizing up properties to put them up for sale.
A study by the University of Dortmund concluded that of Germany’s 35,000 churches, about one-third could be closed with the nation’s Protestants and Catholics holding their first-ever ecumenical gathering this year as part of a concerted effort to shore up their flagging fortunes.
While ageing and shrinking congregations is something that Germany shares with most other Western nations, the slump in membership combined with the economic downturn that has engulfed the nation have badly hit one of the German churches’s prime sources of income – the so-called Kirchensteuer (Church tax).
Raising about EUR 8 billion a year, the Church tax makes up about 80 percent of the budgets for the two big churches in Germany - the Catholics and Protestants. This includes the salaries of ministers, priests, rabbis and lay employees.
Somewhat unique in world religious affairs, the Church tax also represents a rather remarkable link between the church and state with government tax authorities levying a 9 percent tax as a payroll deduction on the income of every Protestant, Catholic, and Jewish German who declares their religion on the tax forms.
The origins of the Church tax date back to the early part of the 19th century when the churches were granted the right to levy taxes by Prussia partly as a way of compensating them for property which had been sequestered to help pay for the Napoleonic wars.
The churches’ right to levy the tax now forms part of the German constitution.
But with thousands exiting the church each year and the numbers of taxpayers falling as unemployment escalates to about 10 percent, income from the church has sharply contracted in recent years.
Indeed, while more than 60 percent of Germans say they belong to one or other of the two main churches, more than 60 percent of church members – for example, pensioners and the unemployed – are non-taxpayers and do not pay Church tax
A decade ago, Germany’s protestant church was pulling in EUR 4.3 billion from the tax levied on its members.
Now this is down to barely EUR 4 billion with the government receiving or holding on to between 3 to 4 percent of the total church revenue as a management service fee for collecting the tax.
To avoid paying the tax, German taxpayers have to present to the tax office normally written evidence of when they left their church.
Critics of the church tax say that it has also been a factor in the mass exodus out of the churches because people simply don’t want to pay the tax.
More than 7 million foreigners live in Germany now with the largest number being of Turkish origin. But the Church tax has so far not been extended to include Muslim or other faiths.
Already battling to balance their books, the churches’ have now been alarmed by Chancellor Gerhard Schroeder’s Social Democrat-led government’s plans for boosting Germany’s economic growth by bringing forward tax cuts totalling EUR 18 billion.
This is expected to cut income tax by about 10 percent, which the church leaders in some states will result in a corresponding 10 percent cut in their income.