Despite months of discussions, Italian Prime Minister Mario Monti has surprised the Vatican by announcing an end to tax breaks previously enjoyed by the Roman Catholic Church.
This move could bring in up to an estimated one billion euros to help with Italy’s budget deficit.
After telling the European Commission but not the Church, the decision appeared in an announcement on the government’s website.
It was welcome news for some political parties who have been campaigning for the Vatican’s tax exemptions to end.
PSI party leader Riccardo Nencini said:
“Italy is a catholic country. Christians pay taxes, but until now the Church didn’t pay. It’s fair that the Church pays a contribution for its commercial activities.”
However, other politicians were concerned with making sure the Vatican has not been singled out unfairly. One of them was PDL party leader Angelino Alfano.
“If the Government has found general rules which are valid for all non profit organisations and don’t just punish the Church, we will evaluate them in a positive way,” Alfano said.
Previously the Vatican has had tax advantages on commercial property, such as hotels and clinics, because parts of the buildings were non-commercial and used for worship. Now only the parts of the complex used in this way will qualify for the tax breaks.
Italy government ends Vatican tax exemptions