Scientology's strange tax morals

Despite a high income, Scientology does not give a cent to the state treasury. Now the sect also wants to be officially exempt from the obligation to pay tax.

Tages-Anzeiger, Zurich, Switzerland, January 5, 2000
By Hugo Stamm

Scientology's tax returns are blank. Although the organization's sales are in the millions, for years it has not listed a Swiss frank in either proceeds or capital. Nevertheless, the psychosect now wants to be officially exempt from the obligation to pay tax.

High prices, no income

There is hardly another organization which is run as efficiently as Scientology. Therefore it is surprising that the organization lists no income. It requires exorbitant fees from its members for services and materials. For the luxury edition of a so-called Hubbard electrometer (a type of lie detector, or a device for measuring the skin's electrical resistance), one pays about 5,000 franks; some "therapy seminars" (auditing) cost several hundred franks per hour. Because Scientology only gives auditors pocket money of from 50 to 100 franks per week, the pseudochurch would really have to putting down a huge margin of profit. Former Scientologists who have worked in its revenue office state that the Zurich Center has made ten to thirteen million franks yearly. Scientology spokesman Juerg Stettler recently said in an interview that the "church" makes ten million franks annually across Switzerland. The amount of income today cannot be checked out. Certainly it can be said that the Swiss Scientologists, in international comparison, are the best donors: in the last several years they have put around 20 million franks into the "war chest."

Scientology declares its seminar fees as donations. A quirk in order to be better able to legitimize tax exemption and justify the harsh business practices. Scientology founder Ron Hubbard unabashedly described Scientology's sales methods as "hard sell."

Considerable advertising

What is the money used for? Scientology performs a considerable amount of advertising and proselytizing, but since it hardly has any wage expenses, there would still have to be a profit. In regard to that, sect founder Hubbard said, "The costs we have to cover to defend ourselves in court in a dozen countries are not small."

In the USA, for example, the Scientologists conducted a "war" (their words) for forty years against the American revenue office which cost the sect millions. It hired private detectives which spied on revenue officials and placed advertisements for persons or companies who had had negative experiences with the IRS. Then the pseudochurch put top agency members on public display in large newspaper advertisements and filed 2,500 law suits to wear down the officials. "Making public the names of the criminals inside the IRS brought about the desired effect," wrote the sect in a report.

Won the tax war

It won the "expensive war of attrition" in 1993. Scientology boss David Miscavige announced at a bombastic victory celebration: "Now we can dedicate ourselves completely to the real war. The war that affects every individual on the planet. The war which only we can win." Therefore Scientology is now concentrating on "reaching the billions of people who need Dianetics and Scientology." "The prize is immortality," said Miscavige. What the Scientology Boss did not mention, however: in the deal with the revenue officials Scientology also paid a considerable cost. The sect and its adherents dropped its lawsuits and paid the agency 12.5 million dollars, as the Wall Street Journal wrote.

Also a tax war in Zurich?

Is the Zurich agency threatened with a similar "war"? Probably not. Since the Scientology Church does not pay taxes anyway, they are limited by expenses. Nevertheless the tax officials have to prepare for some hard times because when the Scientologists go into "battle," they arm themselves to the teeth, to use their figure of speech.

The Zurich Scientologists are motivated to apply for tax exemption because of Scientology's success in Sweden. In England, however, they suffered a setback. What are the chances in Zurich? According to the new tax harmonization law, exempt organizations will include those who exclusively pursue cultural goals, perform public functions or are for the common good. In view of the expensive seminars, the two latter criteria probably do not apply. Whether Scientology is a church or has a cultural goal is a never-ending point of dispute. Sect critics believe that Scientology pursues commercial goals above anything else. Scientology spokesman Juerg Stettler was not prepared to give any information about income or the application for tax exemption.

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