Vatican Defends Tax Advantages Cardinal Sees Bid to Undermine Church in Polemics, ANSA, September 4, 2007

Vatican Defends Tax Advantages
Cardinal Sees Bid to Undermine Church in Polemics

ANSA
September 4, 2007

http://www.ansa.it/site/notizie/awnplus/english/news/2007-09-04_104113558.html

Vatican City — The Vatican Secretary of State lashed out on Tuesday at politicians who have questioned the tax advantages enjoyed by the Catholic Church in Italy.

Without naming any group specifically, Cardinal Tarcisio Bertone said critics were stoking "cheap" polemics and "falsifying" reality by presenting the tax breaks as undeserved and unjustifiable privileges.

Ongoing controversy over the fiscal treatment of Catholic institutions in Italy intensified recently when the European Commission asked the Rome government for further information on the issue.

The Italian Church argues that tax breaks are justified where its social, cultural and charity activity is concerned because of the value of that work to society. Its social contribution would be reduced if full taxes were paid, it says.

In an interview with Italian weekly Famiglia Cristiana, Cardinal Bertone widened the scope of the polemic from a purely Italian squabble to a global one.

"If Catholic organisations stopped work, many tens of millions of people throughout the world would be deprived of the only support they can count on every day," he said.

He stressed that the Church would never order a 'strike' in order to prove its point.

But he complained that the Church's opponents were taking advantage of this to undermine the credibility of "institutions which are the most active in healing society's wounds." The prelate was apparently referring to Italy's Rose in the Fist (RNP) party, a government ally made up of Socialists and libertarian, free-market Radicals which has been vocal in complaints about the Church's "privileges". "Those that systematically stoke these polemics should review their strategy which damages not only Italy's public image but also the beneficiaries of the Church's charity and social work," Bertone said.

PROPERTY TAX EXEMPTION. The Commission is reportedly interested in a law passed by the Silvio Berlusconi government in 2006 which effectively exempted all Church property used for commercial purposes from local real estate tax.

Officials at the Competition Commission are also believed to be interested in the 50% reduction in corporation taxes applied to church business activities such as schools, hospitals, clinics and hotels.

It has emerged that a complaint about the Church's tax treatment was lodged in Brussels last year by a group of Italian businessmen supported by the Radical party.

The Radicals, along with other secular groups have long opposed the Church's special tax advantages on the grounds that they go against the separation of Church and State written into the constitution.

As well as the tax breaks, the Italian Catholic Church also receives a share of the income tax paid by Italians every year. Last year the figure allocated to the Church was 930 million euros.

This payment, together with the special tax conditions enjoyed by the Catholic Church, costs the Italian Treasury 1.3 billion euros a year, according to most estimates.