Lima Newsroom, August 23, 2024 / 4:15 p.m.

One day after the dictatorship of President Daniel Ortega and his wife, Vice President Rosario Murillo, stripped 1,500 NGOs of their legal personality in Nicaragua, it also abolished income tax exemption for churches.

Lawyer and researcher Martha Patricia Molina sees the measure as a “financial blow” that will ultimately lead to “the (Catholic) Church being financially suffocated so that it collapses under its own weight.”

The official government newspaper La Gaceta published Law 1212 on August 22, which amends three other laws: the Law for the Regulation and Control of Non-Profit Organizations, the Law for the Regulation of Foreign Agents and Law 822 on Tax Coordination. The newspaper reported that this decision was taken by the country’s parliament on Ortega’s initiative.

Article 5 of Law 1212 orders the repeal of “Section 3 of Article 32 of the Tax Coordination Law” of 2012 and its reforms.

Section 3 of Article 32 states: “Churches, religious communities, denominations and religious foundations with legal personality shall be exempt from income tax with respect to their income from activities and assets which serve exclusively religious purposes.”

An anonymous expert quoted by the newspaper La Prensa explains that with this decision of the dictatorship, “all churches of all denominations will be subjected to the tax terrorism to which the dictatorship has subjected the private sector and now also religious institutions” and that they will have to pay between 10 and 30 percent income tax.

Regarding this decision, Molina, author of the report “Nicaragua: A Persecuted Church?”, which mentions 870 attacks by the dictatorship on the Catholic Church since 2018, claimed that government authorities had already been to the parishes and demanded documents on their accounts.

“In the weeks before, the regime authorities had visited parishes to request information about their accounting. They wanted to see the main and subsidiary books, as well as income and expenditure, something that is obviously not done in the parish administration,” Molina wrote on X.

“Now priests have to hire a certified public accountant (CPA) to keep all these accounts and also identify who their main donors are,” she added.

The expert quoted by La Prensa also pointed out that religious schools will also be subject to the tax regime. “A fiscal hell for the churches is imminent,” he warned.

Regarding this and other decisions of the dictatorship, Vice President Murillo stated that they were made as an “act of solidarity.”

“We have explained in recent days that any organization, depending on its nature or field of activity, can request to be included in the partnership alliances with the Ministry of the Interior or the Ministry of Foreign Affairs to carry out their programs or projects, whatever they want to carry out in the country, within the prescribed framework of compliance with the laws of our country and, above all, knowing that their work is a work of fraternity and solidarity, so there are no other considerations, exemptions or special treatment in terms of taxation with regard to their activity,” explained Murillo.

Felix Maradiaga, former presidential candidate and president of the Freedom for Nicaragua Foundation, told 100%Noticias on August 20: “History has shown us that repression cannot suppress a people’s desire for freedom indefinitely. Nicaragua, with its rich tradition of faith and resistance, will be no exception.”

“Churches and civil society will continue to be bastions of dignity and courage, standing bravely against tyranny. And it is our responsibility as human rights defenders to raise our voices and support those who, despite everything, continue to fight for a free and just future for Nicaragua,” he said.

This story was first published by ACI Prensa, CNA’s Spanish-language news partner. It was translated and adapted by CNA.