In the news:
Originally published Thursday, February 16, 2012 at 10:05 PM
Italy aims to tax Catholic Church's commercial property
Ending the Roman Catholic Church tax break could result in revenues of $650 million to $2.6 billion annually.
The New York Times
ROME — Over the years, the Italian government has quietly passed scores of laws that benefit the Roman Catholic Church, but it is rare for it to issue a public statement saying it intends to strip the church of privileges.
The government of Prime Minister Mario Monti took that step Wednesday, telling the European Commission it intends to change Italian law to ensure the church pays property tax on the parts of its buildings used for commercial ends.
The church owns vast amounts of property in Italy, and the move is aimed at making sure convents that offer bed-and-breakfast or church buildings that rent space to shops pay their full share of taxes.
The change, once formally drafted and approved by Parliament, could result in revenues of $650 million to $2.6 billion annually, according to municipal government associations.
It could also set an example for other debt-strapped European countries, most notably Greece and Spain, where there is growing popular resentment over tax breaks for the church.
Even in Catholic Italy, the proposal shows the ability of the churchgoing Monti to read the national mood. Faced with their own belt-tightening and tax increases, Italians are fed up with what they see as unfair privileges, be it of the political class or the church.
After new austerity measures were passed in December, 130,000 people signed an online petition calling on the government to revoke the church's tax-exempt status.
"It was time that they paid, too, with all the exemptions they've had throughout the years," said Marco Catalano, 35, a shopkeeper in Rome. "They own the most beautiful buildings in downtown Rome, on Italian soil, and rent them out at market prices. They don't give them for free or at low prices for charity."
Many church buildings fall into a gray area, taking advantage of a tax exemption for a religious organization's buildings even if they are largely commercial in use.
In a statement to Joaquin Almunia, vice president of the European Commission, the government said it would revoke the tax exemption for church property whose commercial use is "not only exclusive but also prevalent."
It also proposed that the Italian Finance Ministry draw the line between taxable and tax-exempt spaces within the same building, a difficult provision to enforce if the law is passed.
The Italian Bishops Conference said Thursday: "We are waiting to find out the exact formulation of the text to be able to offer a more precise opinion."
