Tags: Spain | Tax | Churches | Money

Spain Debates Taxing Churches to Raise Money

Monday, 04 Jun 2012 10:40 AM

 

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Spain's Catholic Church faces growing public pressure to dip into its pockets and start paying taxes on some of its properties as the economic crisis deepens in a country where even the King has had to tighten his belt.

The measure would bring the state little money but would be of huge symbolic value to a population in which seven out of ten consider themselves Catholic.

Eight out of 10 now support ending the tax exemptions the Church benefits from, according to a poll in El Pais newspaper.

"In a time of crisis, when everybody has to make an effort...the Church has to make an effort too," said Oscar Lopez, number two in Spain's opposition Socialist party.

The party is pressing for all local governments to tax the Church on its religious schools, clinics and properties providing social services—in accordance with existing laws that are rarely implemented.

With Spain at the center of the financial storm sweeping across the euro zone, center-left politicians say the country should also reconsider an international treaty signed with the Vatican in 1979 that exempts the church from paying taxes on its places of worship.

"Many say 'why while I'm having a hard time and have to pay more (taxes) this institution, which is not having a hard time, doesn't have to?'," said Santiago Sanchez Guiu, an economist at Carlos III University in Madrid.

As public spending contracts in the face of recession and soaring unemployment , even the royal family has had to chip in, seeing its budget frozen since 2010 and for the first time publishing some details of its spending.

In financial terms, squeezing a fiscal contribution out of the Church would have just as little impact, with daily El Mundo estimating ending tax exemption would raise just 5 million euros a year, or 0.01 percent of Spain's 2012 planned budget deficit.

The Church has said it would pay the tax provided other religious and non-profit organizations did likewise.

Spain's bishops, meanwhile, deny the Church enjoys special privileges and say it spends a lot of money maintaining a rich and costly heritage that is of wider cultural significance.

© 2014 Thomson/Reuters. All rights reserved.

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