Spotlight cast on IMI exemptions for church and political parties

in Business · 01-09-2016 14:31:00 · 0 Comments
Spotlight cast on IMI exemptions for church and political parties

The Lisbonense Homeowners Association (ALP) has this week slammed the fact that real estate assets belonging to political parties are exempt from the IMI Municipal Property Tax and demanded a “greater and more effective fiscal fairness”, while clarification has been sought from the government as to why a number of parish churches have started to receive IMI bills from the taxman, in contravention of a long-standing international agreement between the State and the Church.

In a press release issued this week, the ALP, which represents urban homeowners, declared that the IMI and other tax exemptions bestowed on property owned by political parties be scrapped.
Its comments came as it was announced that the government is drawing up a new tax on assets just weeks before the public presentation of next year’s State Budget, and demanded parties with seats in Parliament clarify their positions on it.
“It is essential that the political parties in Parliament and, above all, those who support the government, clarify whether they effectively want greater tax justice, or if this is just empty jargon used in inconsequential political statements to justify successive and unaffordable increases in taxes on private property and on the middle class, which have been brought into play”, the statement said.
The ALP recalled that in early August, the government indicated its intention to “brutally increase the IMI tax burden”, quadrupling location and operational factors relating to the tax “which will increase the taxable value of assets and, consequently, the amount of tax revenue.”
“In an attack on the middle class, which was forced to buy real estate for permanent housing due to the freezing of the century of the rental market, the Government argued that the change had the sole purpose of introducing greater fiscal justice”, the association stressed.
The association’s statement cites a report from weekly newspaper Expresso which reveals €30.2 million in real estate assets belonging to political parties is exempt from IMI and IMT taxes under a law from 2003.
Expresso reports the three parties alone that make up the Government own more than €23 million in property.
“The ALP rejects this deeply discriminatory law under which middle-class taxes are used to finance tax breaks for large parties owning real estate, who do not shy away from continuing to increase those taxes from which they are exempt”, the statement slammed.
Meanwhile, it has been queried why Portugal’s Church is being asked to pay the IMI municipal tax on its properties.

According to newspaper Diário de Notícias the heads of the country’s dioceses met on Monday to draw up suggestions for the tax authority of ways it could completely or partially reduce its IMI Municipal Property Tax bill.
Various dioceses have reportedly complained of being contacted and asked to pay IMI tax on properties belonging to the church, which breaches an international agreement between the state and the Catholic Church.
Portugal’s main opposition group, the Social Democratic Party (PSD), on Monday called on the Socialist government to explain why its officials are charging the Catholic Church municipal property tax, when the state’s financing needs should “respect the law and existing international treaties.”
In Portugal, relations between the state and the Catholic Church are governed by a Concordat, signed by the government and Vatican officials.
“Explanations must be provided on why [the Church] was not being taxed before and is being now; what led to this change in circumstances, if perhaps there is a change in relation to what is agreed in the Concordat between two states”, PSD MP Duarte Pacheco said in comments to Lusa News Agency.
While the government may need revenue, he argued, these “may come from wanting to tax the sun, wanting to tax the Church, wanting tomorrow to tax the air we breathe, but they must be in line with the law and with international treaties.”
Asked whether the PSD believes that under the Concordat it is possible to levy the tax, Pacheco responded that “if it should have been done and was not being done, that means that over the years the state was behaving illegally.”
“One presumes” that this was not the case, he added, supposing that the policy under all previous governments of not levying the tax “had a legal basis.”
The Portuguese Episcopal Conference has already said publicly that it believes the Concordat is not being observed correctly in this case.
“I know of some cases, this isn’t the first time, but it is being done now more often”, a spokesman for the Conference, Manuel Barbosa, told Lusa last week.
“The agreement between the Holy See and the Portuguese state (...) is not being respected.”
International treaties such as the Concordat, he said, are “above local laws.”
The fact that dozens of Catholic parishes had been notified by the tax office that they must pay the IMI municipal property tax was reported last week in the northern newspaper Jornal de Notícias.
Portugal’s Socialist government lacks a parliamentary majority but has agreements with the radical Left Bloc and the Communist Party, in an arrangement that is unprecedented since the post-revolutionary period of the 1970s.
The government is under pressure from the European Union to ensure that it narrows the public sector budget deficit this year to below 3 percent of gross domestic product.


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