Prime Minister Monti makes Vatican pay real property municipal tax
Italian Government ends Catholic Church’s fiscal privileges
The Italian Prime Minister Mario Monti wants to end fiscal exemptions for the Vatican. From now on, the Church will pay taxes on all properties that do not exercise strictly religious activity. A small revolution.
Mario Monti had chosen the right day. On thursday, during the commemoration of the 1929 signing of the Lateran Pacts between Benito Mussolini and the Vatican, the Prime Minister announced to church authorities that from now on they will have to pay the municipal tax on real property (ICI). The Monti Government has prepared a decree to be submitted to Parliament.
The President of the Italian Episcopal Conference, cardinal Angelo Bagnasco, already knew about these measures some two weeks ago and stated that the Church will study “with the necessary sense of responsibility” any “unilateral action” of the Government. Should the bill be approved, the Church will pay dearly for its schools, universities, associations, and convents converted in hotels or offices.
The greeting at the Italian Embassy to the Holy See went very well. But the Vatican isn’t rejoicing. Until now, no italian government had ever dared defy the fiscal privileges of the world’s smallest country. In 2005, Prime Minister Silvio Berlusconi officially introduced the fiscal exemption, until that moment only informal. Berlusconi’s successor, the arch-catholic Romano Prodi, right after taking office, did nothing but to extend the privileges of the Church.
Mario Monti too is a practising catholic. But in times of economic crisis, in which the people is asked to make heavy sacrifices, it is not possible to dispense the Church from all measures. “We will fight all privileges”, Monti has promised after taking office. “No exceptions”.
Strong words. Although the initiative did not come exclusively from the Prime Minister. Some time ago, the European Commission had started an infringement procedure against Italy. The Commission Vice-President Joaquín Almunia positively welcomed Monti’s decisiveness, speaking of a “substantial progress”.
But there is still a lot to study. For instance, there is no document that lists accurately all Church properties on italian territory. The most reliable informations are contained in a study conducted by the Radical Party, a libertarian party.
For years now the Radical Party, of which the former European Commissioner Emma Bonino is member, asks for the Vatican to pay its taxes. According to the study, the italian clergy possesses a total of nearly 50,000 facilities, 30,000 of which with no religious function whatsoever.
Only churches, chapels and monasteries are not subject to the regulation proposed with the decree. Hotels furnished with altars and crucifixes, exempted until now, may expect visits from tax revenue offices. Same thing for hospitals and retirement homes for the elderly.
However, the potential tax levy is not clear. If Radicals estimate the annual financial charging on Church assets at about €2,5 billions, the Ministry of Finance talks about €2 billions; others, €1 billion. The association of italian cities and municipalities is afraid there wouldn’t be more than €500,000 to earn from the Church. According to catholic newspapers, such as l’Avvenire, it could be even less.
Meanwhile, the Church is engaging in remembering the social function that many religious institutes carry out, without seeking any kind of profit. But this argument doesn’t really stick anymore. Political parties, previously always against talks about the privileged treatment of the Vatican, are enthusiast about the measure. It is indeed not a political government, but a “technical” one that will submit the decree.
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