Since taking over from the Benedict XVI, Pope Francis has remodeled the papacy from being a just a spiritual head of the Roman Catholic Church to a powerful moral figure and activist for the underprivileged. Within a short time, he has already established himself as perhaps the most famous champion of social justice and economic fairness.
It, therefore, did not come as a surprise when on the eve of his official visit to the USA he strongly criticized religious orders that exploit loopholes in tax laws to make money while neglecting their core responsibility of helping those in need of their assistance.
The Pope made this criticism in an interview he gave to a Portuguese Catholic broadcaster. The criticism was specifically directed at religious orders in Italy that carry out profitable business activities in church-owned properties but avoid paying taxes by making part of the property maintained as a chapel.
In Italy, the Catholic Church owns over 100,000 buildings that are estimated to be worth $10 billion. Before 2013, all these church properties were untaxed. These included properties where religious orders ran lucrative businesses mostly dealing in hospitality. In 2013, Italy passed a law compelling the Church to pay taxes on all properties they owned except those that were used for religious purposes. However, many religious orders have found a way of circumventing this law by converting a part of church property used for businesses into a chapel. By arguing that the property is not a fully commercial one, they are able to avoid paying taxes.
The Pope, who has spearheaded a campaign against a global economic system that he has referred to as ‘bad and unjust’ for perpetuating great inequality, took issue with this non-payment of taxes by the Italian religious orders. Such a practice, perpetuated by orders nominally under him, went against his own teachings because they epitomized the injustice in the economic system that he has been vocal against since becoming Pope. In his criticism of the business-minded religious orders, the Pope noted that it was unfair for profitable businesses run by religious organizations not to pay taxes while their competitors paid taxes. This made the church appear like a privileged organization deserving special treatment. For a Pope who has been at the forefront of combating privilege, special treatment for the church he heads is simply unacceptable. According to him, if religious organizations decide to engage in business they should be ready to pay taxes just like other businesses do.
The Pope’s criticism should also be viewed as part of his long held concern about religious institutions engaging in money-making activities. As he explained while making the criticism, most religious orders and institutions that decide to engage in business activities do so in the guise of making money to support their activities instead of completely relying on the charity of their congregation for financial support. However, as the Pope pointed out, this focus on making money usually came at the expense of a more crucial responsibility of the church- helping the poor and the downtrodden in the society.
Although the Pope’s criticism about non-payment of taxes and neglect of the poor in the society was directed at Catholic religious orders in Italy, there is no doubt that the statement rings true across the world where churches are increasingly focused more on making money instead of helping the needy in the communities they operate in. As in Italy, most church properties and businesses are untaxed. In the USA, it is estimated that churches have properties that are worth $600 billion. If all these properties were to be taxed, they would generate annual revenues exceeding $83.5 billion.