Investigate Thee, Not Me
A few weeks ago, I blogged about a forthcoming papal encyclical in which, Vatican watchers claim, Pope Benedict XVI will condemn those shirking their financial responsibility to the state. The London Times reported that "the pontiff will denounce the use of 'tax havens' and offshore bank accounts by wealthy individuals, since this reduces tax revenues for the benefit of society as a whole." Italian Prime Minister Romano Prodi, the Times said, was urging "church leaders to speak out on tax evasion, telling the Catholic magazine Famiglia Cristiana that a third of Italians heavily evaded taxes, which were needed to plug Italy's huge budget deficit."
But now the European Commission is investigating the Vatican for—you guessed it—a series of dubious tax breaks. AKI details some of the breaks the church receives in Italy, though the investigation encompasses Vatican properties in Spain too:
The Vatican receives tax breaks worth some 1.3 billion euros annually from the Italian state. It pays only half the normal corporation tax on most of its business activities, including schools, hospitals, clinics and hotels. In Rome alone, the Vatican owns 18 hospitals, 55 clinics and 250 schools, according to La Stampa.
The archbishop of Genoa called the investigation a "provocative attack"; Italy's justice minister said it was "anticlerical." But the Vatican is ready to strike a deal. One official told Italy's La Stampa that "The Holy See is ready to sit down at table with the government to update the Concordat and review the tax issue."