Debt-Stricken Italy Asks Vatican to Pay Taxes

12 December 2011

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The Roman Catholic Church in Italy is under growing pressure to start paying taxes on its massive property portfolio, in a move that could raise up to 800 million euros (£680 million) a year and help bail the country out of its economic crisis.

As the new technocrat government of Mario Monti seeks to slash the nation’s 1.9 trillion euro debt, attention is turning to the estimated 65,000 buildings owned by the Church. According to an estate agency, Gruppo RE, a fifth of publicly owned properties in Italy are directly or indirectly controlled by the Church.  They include around 50,000 cathedrals, churches and chapels — which would retain their tax-free status — but 11,000 schools, universities and libraries as well as nearly 5,000 hospitals, clinics and other commercial properties would face the tax. All church properties, including those having a commercial element, have been exempt from taxes since 1982, with an extension put in place in 2006.  But critics say the proposed law contains loopholes which can easily be exploited. If a Church-owned property such as a hotel contains a chapel, for instance, it is spared the tax.

The Church has long argued that it should be exempt from paying the property tax because it provides important social services through its schools, hospitals and community centres. “The Church supports the weakest of society and performs an activity in favour of society,” said Cardinal Tarcisio Bertone, the Vatican’s secretary of state.

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