December 4, 2009

Church of Greece Agreed to Increased Taxation

Synod of the Church of Greece Agreed to Increased Taxation on Church's Real Estate

Moscow, December 3, 2009

On December 1 the Synod of the Church of Greece, at a special meeting, agreed to the triple increase in tax of the Church's real property (from 1% to 3%). However, the agreement applies only to property of the metropolias, but not to temples, monasteries and other legal entities, and applies only to 2009, said REGIONS.RU.

For its part, the Greek Economy Minister George Papakonstantinu said that the government is ready to begin a dialogue with the Church on all the contentious economic issues, "from scratch" and without any preconditions. He asked that the Church to determine who on its behalf, will conduct this dialogue.

The Minister also confirmed that the tax increase is temporary and applies only to the current year; in 2010 the same year the rate will be discussed separately. The tax increase, he said, is due to budget constraints in the financial crisis. In addition, the tax increase does not apply to all real estate, but only to that which generates income.

In Greece, the relations between the Church and the new socialist government deteriorated almost immediately after the election, when the Government put forward amendments to the tax law, increasing the tax on Church property almost threefold. As noted by the Holy Synod of the Church of Greece, tax innovations in violation of the principle of equality, do not affect property belonging to ministries, public organizations, universities and other entities of a non-commercial nature. There was no tax increase on real estate which is used for commercial purposes.

The compromise reached in 2009, according to the Church, is motivated by a desire to begin negotiations with the state and the duty to help the Greek people in crisis -- although the tax increase will impede her charitable work. The Synod's decision stresses that the Church of Greece has 700 charitable institutions in the country, and its social spending amounts only to 100 million euros a year.

The Synod also agreed with the other requirements of the Ministry of the Economy - in particular, the requirement to limit the [horse] power (and therefore the cost) of the metropolitans' cars, but only in cases where the costs are borne by the State.