Nicaragua’s Parliament Approves New Tax Measures Impacting Churches and Religious Organizations
In a recent development, Nicaragua’s parliament has passed new tax measures that will have a significant impact on Churches and religious organizations of all denominations. The National Assembly approved a tax reform on August 20 that eliminates tax exemptions for religious institutions, making them liable to pay income tax on activities and assets, even if solely designated for religious purposes.
This reform means that all Churches, regardless of their denomination, will now have to adhere to a tax regime similar to that of the private sector, where generating legitimate profit is the main objective. Offerings, alms, and donations received from the faithful will now be subject to income tax at rates varying from 10 to 30 percent.
The removal of tax exemptions is expected to have a severe impact on the operational and financial capacities of religious communities. These organizations are actively involved in educational, social, and assistance projects, with the most vulnerable social groups likely to bear the brunt of the consequences.
This decision comes at a challenging time for the Catholic Church and other religious and civil organizations in Nicaragua. The government has recently arrested and expelled priests and revoked the legal status of around 1,500 non-governmental organizations, many of which are religious. The assets of these organizations have been transferred to the State, causing further distress.
The United Nations High Commissioner for Human Rights has expressed deep concern about the situation, emphasizing that such actions by the Nicaraguan government pose a threat to freedom of religion and association. They have called for the protection of fundamental freedoms of individuals in the country.
It remains to be seen how this new tax reform will impact the religious landscape in Nicaragua and how Churches and religious organizations will navigate these challenges moving forward.
Written by Giancarlo La Vella
