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It seeks clarifications over megachurch’s $310m stake in Suntec

City Harvest Church is now a co-owner of Suntec Singapore, and has said it will use two floors in Suntec to house a 12,000-seat auditorium for worship services. — ST PHOTO: ALPHONSUS CHERN

THE Commissioner of Charities has questioned City Harvest Church (CHC) about its $310 million stake in Suntec Singapore.

The 33,000-strong megachurch announced two weeks ago that it had become a co-owner of the downtown commercial property, which houses a convention and exhibition centre.

The complex’s full name is Suntec Singapore International Convention and Exhibition Centre.

The money spent includes renovation and rental costs, the church said. CHC has not created a separate business entity for the purchase of the property.

But in the wake of the announcement, questions surfaced among the public about whether religious organisations – which are registered as charities – should be allowed to go into business using what are essentially donor funds.

Some asked if the income collected by CHC through rentals at Suntec would be taxed.

Questions were also raised about whether the church’s plans to use two floors in Suntec for worship services would amount to a change of use of commercial properties.

When The Straits Times posed these questions to the Commissioner of Charities, he said he was not in a position to comment at the moment as his office is ’seeking clarifications from CHC on this business venture’.

However, a letter jointly issued by the Ministry of Community Development, Youth and Sports, the Urban Redevelopment Authority (URA) and the Inland Revenue Authority of Singapore provided some answers.

The letter was a response to Straits Times reader Lester Lam, who wrote to the Forum page and questioned the relevance of giving religious organisations tax-exempt status when several such groups own commercial properties and collect rental income.

The government bodies responded that incomes earned by charities are tax-exempt because their main purpose is to provide public benefits through their activities.

They acknowledged that some charities have chosen to engage in business activities to generate additional income, but said such business activities ‘must be done in the best interest of the charity and not subject the charity’s assets and resources to unacceptable risk’.

Charities contacted said that the decision on what is an ‘acceptable risk’ is left to their boards. They said investment decisions are made internally, and that they are reflected in their accounts, which are subject to audit.

The joint letter went on to say that any business carried out by a charity under a separate legal entity is subject to the normal corporate income tax.

It added that the ‘exclusive use of commercial developments for religious purposes would constitute a material change of use of such developments into places of worship’.

Doing so requires a proposal to be submitted to the URA. URA said no such proposal has been received from CHC.

The church, which had said earlier that it would use two floors in Suntec to house a 12,000-seat auditorium for worship services, could not be reached for comment last night.

During the March 6 service, senior pastor Kong Hee said that the auditorium would be used exclusively for its services, except under certain circumstances.

He said then that it would move out about five times a year to allow for international conferences or events to be held there.

The church has spent the past five years looking for a suitable plot of land, said Dr Kong, who founded it in 1989 as a small Bible study group of 20.

The Suntec purchase came after it looked at tens of other properties, including the Lion City Hotel in Tanjong Katong and Iluma in Bras Basah Road, but rejected them as they were considered unsuitable due to their small size or likely traffic congestion.

Source : Straits Times – 20 Mar 2010