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April 2001


IS THE WATCHTOWER SOCIETY

CHEATING THE CANADIAN GOVERNMENT?



For over twenty years, we at MacGregor Ministries have assisted many people damaged by the Watchtower Society--broken families, families grieving loss of loved ones due to refusal of blood transfusions, desperate people "disfellowshiped" and "shunned," Parents and Grandparents denied access to their children by this group, heart-breaking custody cases... The list goes on and on. We do our best to offer these victims Christian comfort. Along with this, we have carefully researched this group and its doctrines and practices. We have concerns that Canda is a tax-free haven for them.

The Government of France conducted an investigation into the activities of the Jehovah's Witnesses in their country . They concluded that they were not a charity at all, but a business, and revoked their church exemption. They assessed them $50 million in back taxes. We believe Canada has an even stronger case for collecting taxes owing, especially the GST (Goods and Services Tax of 7% Nationwide).

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WATCHTOWER TACTICS FOR AVOIDING THE GST

Just prior to the introduction of the GST in Canada, the Watchtower Society put into practice a new "donation" arrangement. Why did they do this for the first time in 100 years? Prior to this new arrangement they had a business relationship with their followers. They sold their materials to their followers called "publishers" at the Kingdom Hall. It was a sales transaction, plain and simple, always involving money. The publishers then went out door-to-door and sold the Watchtower literature to the householders at a fixed price and kept the money to "repay" themselves for what they had paid at the Kingdom Hall.

With the introduction of the GST, you can readily see the problems this practice would cause for this WT Organization, which had never paid sales taxes. Whereas previously they had sharply criticized the churches for asking for donations, now they implemented a practice designed to rake in dollars without paying taxes on all their sales. As the Government of France rightly concluded, they are a sales organization.

With the new "donation" arrange-ment,everything, outwardly re-mained the same. Jehovah's Witnesses picked up their literature at the Kingdom Hall, placing their "donation" in a handy box under the sharp eyes of an elder of the group.

When they did go door-to-door they could not keep the money they collected, but were instructed to hand it back to the Society. It didn't take long for the publishers to ask why they were now paying for everything twice!

All this collected money, obtained by selling literature, the Society classified as "donations". Publishers were warned not to ask for contributions for " literature" but for the "worldwide preaching work", so it would mask what the transaction actually was, "sales".

Had everything really been voluntary, perhaps the Watchtower could have gotten away with this, but soon they were setting "prices" on their sales goods, while still calling it a "donation". Their in-house publication "Our Kingdom Ministry" , under date of November, 1996, page 3, said this:

"...many publishers estimate what these items might cost if commercially produced and then they contribute accordingly. For example, a deluxe gold-edged Bible can easily cost $20 or more, a reference book may be $40 and up, a full-color wall calendar may sell for at least $5, an encyclopedia on CD-Rom costs from $50 to $100 or higher, music compact discs commonly cost close to $20 and some videos are often sold for much more. A failure to contribute enough to cover costs will ultimately restrict what the organization may otherwise be able to accomplish in furthering the worldwide work....". No one would now dare to pay less than instructed. Hardly a voluntary "donation"!


Although this next experience was reported from the USA, rules are the same for Canada. The Jersey City West Congregation ordered some $3,000 worth of Society items, while only contributing $500. The Society sent the congregation a bill for a $2,500 shortfall! This was reported as a "donation" to Headquarters from the congregation. As the writer said "...They are a publishing house...we are their salesmen...". What is voluntary about this? Is this a "donation"?

Upon reviewing the Watchtower Registered Charity Information Return and Public Information Return for Canada for the years 1992 to 1996, we have the following questions:

The total receipts figures fluctuate between 20-26 million dollars. Tax receipts for donations run about 5-7 million dollars. How do they account for the rest--a difference of 15-19 million? They report no bequests or inheritance income. They do say they got 7-8 million from "other registered charities". We cannot conceive of any other charity in Canada giving them money. Who are these charities?

We have closely researched this organization for over twenty years. Our best guess is that they are probably selling their literature from their printing plant in Halton Hills, Ontario to other countries and reporting the revenue as "donations" rather than "sales". We believe that if someone checked into this they would find print orders being filled and shipped.

Another possibility is that Head Office in Brooklyn, New York is stashing funds in Canada., for their own reasons. They are weathy enough to buy up for cash, City blocks in Brooklyn Heights, New York City, some of the most expensive real estate in the world. We have to wonder why the Head Office in Brooklyn, New York is presently restructuring their whole operation into three separate cor-porations. It's all very suspicious. We also wonder why the Canadian branch had over 30 million dollars "cash on hand" in 1996. Imagine how far this amount would go if they really did chartiable works in the community!

As a Canadian Charity ourselves, we know our Canadian contributions should not be leaving our country, but be used for ministry here. In 1996 the Canadian branch of the Watchtower Society disbursed 15 million dollars outside Canada! Why and where?



They admitted, under the heading "charitable programs" they have "contracts with associated branches". We find it hard to believe these "contracts" are "charitable programs". Our best guess is that they are printing and selling publications, all without paying a cent of GST.

We hope the Canadian Government Auditors will follow the lead of other countries like France, Germany, and Italy in invest-igating the blatant commercial activities of this group and recover lost millions in tax revenue.

When the GST (Goods and Services Tax) was introduced in Canada the Watchtower Society suddenly had "new light". They would cease selling their publications at a set price and begin "selling" them on a "donation" basis. How much tax revenue has this cost the Canadian Government?

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Let's use statistics from the January 1, 2001 Watchtower of Jehovah's Witnesses, which contains the figures for their activities in 2000.

They report 107,742 "average publishers". (Those who report time spent in literature distribution each and every month). They also report 11,594 "average pioneers" (regular full time workers).

Adding the two figures together, Canada has 119,336 Jehovah's Witnesses regularly distributing their literature.

Each publisher has a goal (quota) of 12 magazines per month. Each pioneer has a goal of 80-100 magazines per month. To be VERY conservative, let's say each one, publishers and pioneers together place an average of 10 magazines each per month.

10 magazines x 12 months = 120 magazines per year per "selling" person.

Before avoiding the GST, these magazines sold for 35 cents each. Let's apply that to our figures.

120 magazines per member per year @ .35 cents each = $42 per year per member in magazine revenue.

$42 x 119,336 average members = $5,012,112.00 revenue.

GST on these sales (avoided) = $350,847.84.

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Also, each JW has his/her own subscription.

4 issues per month = 48 per year.

48 issues @ .35 = $16.80

$16.80 x 119,336 = . $2,004,844.80

GST avoided on subscriptions: $140,339.14

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Total Year 2000 GST avoided

(very conservative estimated amount) $491,186.98.

Of course the WT Society could charge back Input Tax Credits against this total, but their expenses are very small (not nearly commercial ones due to their volume--over 20 million worldwide per issue. How many are printed in Canada? That figure is hidden.)

This is just the tip of the iceberg. Count in sales also of books, tapes, CD's, calendars, etc. and multiply the GS Tax avoidance accordingly.

Revenue Canada--Please look into this!

 


 

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