Sun, Dec 11, 2011 - Page 11 News List

Church tax debated in Italy

Austerity-hit Italians call for tax on Catholic Church real estate


Calls are growing for the Roman Catholic Church’s vast real-estate holdings in Italy to be more heavily taxed at a time when ordinary citizens must tighten their belts.

Tens of thousands of people have signed an online petition for the Church not to be spared a property tax envisaged by Italy’s new Cabinet and lawmakers from parties on the left and right are now backing the campaign.

Italian Cooperation and Integration Minister Andrea Riccardi joined in on Friday, saying: “The Church should pay the IMU for commercial activities.”

He was referring to a new municipal tax from which Church property used for commercial purposes, including hotels, is currently exempt.

Angelo Bagnasco, leader of the conference of Italian bishops, said: “If there are points in the law that have to be reviewed or discussed, we are not against it.”

However, he said, the current rules “recognize the social value of the activities of non-profit entities, including the Catholic Church.”

Asked about the issue last week, Italian Prime Minister Mario Monti, a practicing Catholic, said: “It is a question we have not yet asked ourselves.”

Under a new austerity regime, the government will ask Italians to pay higher taxes on their real-estate assets, but the Church remains shielded under a 1982 law absolving Church buildings unless they are used exclusively for commercial activities.

The extra revenue from these exempt properties — including hotels, restaurants and sports centers could be 25.5 million euros (US$33.9 million) a year in Rome alone, La Repubblica daily reported, citing official figures.

Eau Vive, a French restaurant near the Pantheon in the heart of Rome, and the four-star hotel Ponte Sisto are both exempt, the newspaper said.

The Church has defended itself saying many of its properties have charitable purposes, such as soup kitchens and community centers.

“The Church gets exemptions like all non-profits ... They are not privileges,” Giuseppe della Torre, a senior Vatican judge, was quoted by Corriere della Sera as saying.

Properties belonging to the Vatican are exempt from Italian taxes altogether as they are considered part of a sovereign state under the Lateran Accords signed between Italy and the Holy See in the 1930s.

The Vatican secretary of state, Cardinal Tarcisio Bertone, said last week that the exemption was “a problem to be studied,” but also added that it supported “the weakest of society and performs an activity in favor of society.”

Those pushing for change say they do not deny the Church’s important social role, but believe it has abused the tax regime.

They want a review of the law to ensure buildings used for commercial activities do not escape tax. And they point out that the EU’s executive commission has investigated competition distortions, notably in the hotel industry, as a result of the Church’s fiscal exemptions.

The National Association of Italian Municipalities said the Italian Treasury stood to earn between 500 million euros and 700 million euros per year if the real-estate tax is extended.

Real-estate agency Gruppo RE said 20 percent of the real estate in Italy was directly or indirectly controlled by religious entities.

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