The dictatorship of Daniel Ortega and his wife, Rosario Murillo, eliminated the income tax exemption for churches just after a day cancelling the legal status of 1500 NGOs in the country. This is a measure that researcher Martha Patricia Molina considers a “fiscal blow” that will end up “financially suffocating the [Catholic] Church so that it falls under its own weight.”
On Thursday, August 22, the official newspaper La Gaceta published Law 1212, 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 reports that this decision comes from the National Assembly of the Republic of Nicaragua, at the initiative of Ortega.
Article 5 of Law 1212 states: “Repeal paragraph 3 of Article 32 of the Tax Agreement Law” of 2012, as well as its reforms.
Section 3 of Article 32 stated that “Churches, denominations, confessions and religious foundations that have legal personality, for their income from activities and assets intended exclusively 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 that the dictatorship has subjected the private sector and now religious institutions to,” and will have to pay between 10 and 30% in income tax.
Regarding this decision, Martha Patricia Molina, author of the report Nicaragua: A Persecuted Church?, which reports 870 attacks by the dictatorship against the Catholic Church, denounced that the authorities have already been to parishes asking for documents on the accounts.
“In previous weeks, regime 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 obviously are not kept in this way in the parish administration,” Molina wrote on the social network X.
“Now the priests will have to hire a CPA [certified public accountant] to keep all these accounts and also to say who their main donors are,” he added.
The specialist quoted by La Prensa also indicated that religious schools will now also be subject to the tax regime. A “tax hell for churches” is coming, he warned.
Regarding this and other decisions of the dictatorship, Rosario Murillo, Ortega’s wife and vice president of Nicaragua, commented that they were made as “an act of solidarity.”
“We have said in recent days that each organization, according to its nature or field of action, requests the subscription of Partnership Alliances to the Ministry of the Interior or the Ministry of Foreign Affairs, to execute its programs or projects, whatever they intend to execute in the country, within the stipulated framework of respect for the laws of our country and above all knowing that their work is one of fraternity and solidarity, that, therefore, there are no other considerations that can be raised around their operations, nor exemptions, nor special treatment, in fiscal terms,” said Murillo.
Felix Maradiaga, former presidential candidate and president of the Freedom for Nicaragua Foundation, said on August 20 in 100%Noticias that “history has shown us that repression cannot indefinitely stifle a people’s desire for freedom. Nicaragua, with its rich tradition of faith and resistance, will not be the exception.”
“Churches and civil society will continue to be bastions of dignity and courage, bravely confronting tyranny. And it is our responsibility, as defenders of human rights, to raise our voices and support those who, despite everything, continue to fight for a free and just future for Nicaragua,” he said.