One day after cancelling the legal status of 1,500 NGOs in Nicaragua, the dictatorship of President Daniel Ortega and his wife, Vice President Rosario Murillo, eliminated the income tax exemption for churches.
Lawyer and researcher Martha Patricia Molina considers the measure a “fiscal blow” that will end up “financially suffocating the (Catholic) Church so that it falls under its own weight.”
The official government newspaper La Gaceta published Law 1212 on Aug. 22, which modifies three other laws: the law on regulation and control of non-profit organizations, the law on regulation of foreign agents, and Law 822 on tax coordination. The newspaper reported that this decision comes from the country’s legislature at Ortega’s initiative.
Article 5 of Law 1212 orders: “Repeal section 3 of article 32 of the Tax Coordination Law” of 2012, as well as its reforms.
Section 3 of article 32 stated that “Churches, denominations, confessions and religious foundations that have legal personhood, in terms of their income coming from activities and assets exclusively destined for religious purposes” were exempt from income tax.
An expert quoted but not identified by the newspaper La Prensa explains that with this decision by the dictatorship “all churches of any denomination will be subject to the fiscal terrorism to which the dictatorship has subjected the private sector and now religious institutions,” and they will have to pay between 10 and 30% in income tax.
Regarding this decision, Molina, author of the report “Nicaragua: A Persecuted Church?” which cited 870 attacks by the dictatorship against the Catholic Church since 2018, claimed that government authorities have already been to parishes asking for documents related to their accounts.
In “previous weeks, the regime’s authorities had visited parishes to request information on how they keep their accounts, they asked to see the general and minor ledgers, income and expenses, which is obviously not done this way in parish administration,” Molina wrote on X. “Now the priests will have to hire a CPA [certified public accountant] to keep all these accounts and also say who their main donors are,” she added.