Does a church/ free association pay tax on tithes & offerings?

We are a small non-denominational church and are registered as an NPO. The cost of auditing and maintaining the NPO status, has become too much. We want to de-register, but was told that we will then have to pay tax on the tithes and offerings made to the church. Is this so?

If you are no longer an NPO then yes you will have to pay tax on the income earned by the church.