In both countries, tax bureaucrats tried to classify spiritual activities as tuition or other taxable services to harass certain movements.

by Attila Miklovicz *

*A paper presented at the webinar “Tai Ji Men: Testimonies of Peace and Justice,” co-organized by CESNUR and Human Rights Without Frontiers on September 21, 2023, United Nations International Day of Peace.

An article already published in Bitter Winter on October 3rd, 2023.

Cardinal József Mindszenty (1892–1975). Credits.
Cardinal József Mindszenty (1892–1975). Credits.

Using fiscal authorities or charges against the enemies of power is not an unknown phenomenon in human history, even in cases of religious leaders. Just by way of example, there was the internationally widely covered case of the Hungarian Cardinal József Mindszenty shortly after the Second World War. The Roman Catholic Archbishop who was raising concerns regarding the emerging Communist regime in Hungary was arrested on 26 December 1948 for primarily conspiring against the state, but also with the false charges of embezzling funds and engaging in black marketeering with foreign currency.

Although in the modern democracies the type of interrogation (i.e., torturing) used in the case of Mindszenty is not typical anymore, the accusation of tax fraud, tax avoidance, or budgetary fraud (as it is called in today’s Hungarian Criminal Code) is obviously recognizable in cases where there seems to be an ideological or political collision between the political powers running the state and unprivileged religious communities.

Even in societies which are considered as top performers as far as freedom of thought is concerned, such as Taiwan, there are instances of using the “tax card” as a weapon to target religious communities.

The case of the Tai Ji Men community is a blatant example of that. The case is widely discussed in international academic literature of religious studies and human rights forums so I will not go into a deep analysis of it, but there is one aspect I found particularly interesting and parallel to one of the ongoing cases in Hungary. It is the endeavor of the state or some bureaucrats in particular—through a state agency, namely the National Taxation Bureau—to recategorize income types of religious and spiritual communities by an attempt to reclassify their spiritual activities or customs.

In the Tai Ji Men case the dizi (the Tai Ji Men disciples) gifted their leader, the Shifu, Dr. Hong Tao-Tze with the so called “red envelopes” as a monetary form of gratitude and respect towards him. The tradition of red envelopes in Chinese culture dates back to hundred or as some say thousands of years. The peculiarity in this case was that the Taiwanese National Taxation Bureau and the prosecutor of the case tried to categorize them as a sort of tuition fee, similar to fees paid to a cram school, despite the explanation of the Ministry of Education itself, which did not classify Tai Ji Men as a cram school.

Tai Ji Men protests in Taiwan.
Tai Ji Men protests in Taiwan.

Eventually after eleven years of legal battle, in 2007, the Supreme Court of Taiwan confirmed that the red envelopes included non-taxable gifts under the Income Tax Act of Taiwan. However, the ramifications of the case are still going on, including the seemingly unnecessary confiscation of highly valuable Tai Ji Men land.

A parallel peculiarity is visible in the case of the Church of Scientology in Hungary.

Like the 1996 crackdown on Tai Ji Men, an all-out dawn raid happened on 18 and 19 October 2017 at all Hungarian Scientology Churches and Missions. The accusation—which is reduced now to the Central Organization and the four largest Missions—is that the named suspects in the church ranks “falsely claimed” that the core practices of Scientology are religious activities in order to avoid paying Value Added Tax (VAT), and by that created an illegal income surplus at the Church. These services in Scientology, namely auditing, which is a form of spiritual counseling and training, which is the education of auditing practitioners, are considered, in the words of American scholar Donald Westbrook, part of the “step-by-step soteriological map intended to take an individual to higher states of awareness and ability” (“Among the Scientologists: History, Theology, and Praxis,” New York: Oxford University Press, 2019, 27) and thus part of a ritual (see Aldo Natale Terrin, “Scientology: Libertà e Immortalità,” Brescia: Morcelliana, 2017, 256–57).

The entrance of the Church of Scientology of Budapest, Hungary. Source: Scientology Budapest.
The entrance of the Church of Scientology of Budapest, Hungary. Source: Scientology Budapest.

The question whether VAT should be added to the services may be disputed in the context of the Hungarian VAT Act, but that would definitely not be a tax fraud. In order to “make it a criminal act” it has to include the deliberate criminal intent of knowingly avoiding tax payment. This is where the tax bureaucrats raise the argument that the practice of the disciples of Scientology is falsely claimed as religious.

Obviously, the instant question emerges: who has the right authority to overwrite the auto-definition of a religious community? This would be the matter for a longer discussion, but while the case of the Church of Scientology is “kept in the criminal realm” of the Hungarian Law, coincidentally the Church may not apply for recognition as a higher-class religious organization per the Hungarian Church Act, which contains a statute debarring the application for organizations with an ongoing criminal procedure.

Both in the cases of Scientology in Hungary and Tai Ji Men in Taiwan, tax laws were weaponized to discriminate against religious and spiritual minorities and violate internationally recognized FoRB (freedom of religion or belief) principles.