The Significance of Church Tax. The historical background, the concept and the significance of church tax. The case of the state church in Denmark

PhD defence

Sidsel Kjems


75% of the population are members of Folkekirken, the established church in Denmark, and pay church tax. Church tax is on average 0.87% of gross income, far from a symbolic amount. Yet, according to a survey in 2016, only 17% of Danes said that religion played a significant role in their lives. This seeming contradiction poses the question: Why do the Danes voluntarily pay church tax? The purpose of this PhD is to answer this question and to investigate the phenomenon of church tax.
The thesis consists of six papers. Paper I, II and III reports a study of the economy of seven established churches; the established churches in the five Nordic countries, in Scotland and England. Paper IV analyses the historical development of the economy of Folkekirken from 1900 to 1958. Paper V analyses the phenomenon of church tax and Paper VI bring evidence from church economy to the dispute between neoclassical and behavioral economic theory.
The study reveals that the level of income varies greatly. The income of the established church in Finland is six fold the income of Church of England, when measured as share of GDP. I show that this is likely due to the difference in choice environment. Church tax is automatic withdrawn from the salary and hence not visible. Paying church tax is the default for most Danes, Finns and Swedes. The two low income churches in England and Scotland are dependent on donations and fundraising. Church tax and donations have opposite default-settings.
Church tax is collected by the public tax authorities, but only paid by members. Based on taxation theory, empirical data and legislation I argue that church tax is a hybrid between a tax and a membership fee and Folkekirken is a hybrid between a public and a private organization. Church tax does contain an element of taxation which raises a cascade of questions regarding the political and legal legitimacy of the church tax. Taxation theory states that taxes ought to finance public service and administration, which can be questioned in the case of established churches. The analysis also applies to other counties where one or more religions, public or private, are financed via church tax schemes.


Niels Kærgård, Professor Emeritus, Department of Food and Resource Economics, University of Copenhagen

Assessment Committee

Chair: Tove Christensen, Associate Professor, Department of Food and Resource Economics, University of Copenhagen

Niels Ploug, Head of Individual Statistics, Statistics Denmark

Bo Sandelin, Professor Emeritus, University of Gothenburg

If you are interested in a full copy of the thesis, you can contact the PhD student or the supervisor.