Zuism and Tax Rebates in Iceland

During the last week there has been wide interest in the rise of Zuism in and its connection to church-state relations in Iceland.  From the Guardian here:

Icelanders opposed to the state funding of religion have flocked to register as Zuists, a movement that worships ancient Sumerian gods and – perhaps more importantly – promises its followers a tax rebate.

More than 3,100 people – almost 1% of Iceland’s population – have joined the Zuist movement in the past two weeks in protest at paying part of their taxes to the state church and other religious bodies. Followers of Zuism will be refunded the tax element earmarked for religion.

Icelanders are required by law to register their religious status with the state, and then some of their tax money is sent to their religious group by the state to be used to fund religious activities.  This is one way to get around the free-rider problem because members are essentially forced by the state to contribute to their religious group.

However, those who do not want to support religion do not have any of their tax money diverted to religious groups so that they are effectively paying a higher tax rate to the state.  As explained in the article, the Zuist group was at risk of being de-registered as an official religion in Iceland, and thus ineligible for money to be sent by the government, due to low numbers.  Then a group opposed to this role of the state in religion took control of the group and promised to refund money given to the group by the government back to the members.  The group has now grown to almost 1% of Iceland's population.  By comparison, in the U.S. the Seventh-day Adventist Church is about 1.4% of the population.

This development is controversial because the money is being refunded by the group to its members rather than providing religious services, clearly against the intent of the law.  However, there are tricky issues about what is a religious group and what it considers its legitimate operations.  If someone says that this group is violating the law, then someone else says, "Who are you to say what my religious group considers religion?"