Debt-Stricken Italy Asks Catholic Church to Pay Taxes

As the new government of Italian Prime Minister Mario Monti is facing a debt of $2.5 trillion, the country’s center-left parties are asking the Catholic Church to start paying taxes on its bountiful properties that make profit. The church may oblige, sacrificing more than $1 billion annually.

“The Church is willing to review the agreements that extend to the paying of ICI (municipal property tax) on properties belonging to religious institutions,” U.K.’s Daily Mail quoted Cardinal Angelo Bagnasco, leader of the Italian Bishops Conference, as saying.

As per a 1982 law, all church properties, including those having a commercial element, are exempt from taxes. This property tax exemption was extended in 2006. “The current norms are correct in that they recognize the social value of activities carried out by many nonprofits, among them church ones, especially is used for social, cultural or educational reasons,” Cardinal Bagnasco said.

However, he added, it was right for the authorities to see if there had been “concrete cases in which a tax that should have been paid wasn’t.” Such an abuse, he agreed, should be verified and brought to an end.

Prime Minister Monti has come up with a $47 billion austerity budget, urging the people of his country to make sacrifices to help reduce the debts.

It is estimated that about one-fifth of all properties in Italy belong to the church, which earns revenues from some of those properties. An online campaign asking the church to make its share of “sacrifice” has obtained more than 120,000 signatures.

“Our investigations have shown that some church properties which are deemed as being exempt from taxes are in fact being run as profitable hotels or hostels – the prices they charge are in line with four star hotels,” Italian Radical Party Secretary Mario Staderini was quoted as saying.

The European Commission is also investigating to see if the exemptions violate EU rules on government subsidies.

The Vatican, which enjoys the status of a sovereign state and therefore doesn’t come under Italian laws, wants the tax exemption for the Catholic Church-owned property to continue.

But some groups, such as the Italy of Values party, do not agree. “Our position is clear, render to Caesar what is Caesar’s and to God what is God’s,” Senator from the party, Felice Belisaro, was quoted as saying.

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