Pope Benedict To Condemn Tax Havens

by Ulrika Lomas, Tax-News.com, Brussels

14 August 2007

Pope Benedict XVI is reportedly working on a doctrine that strongly condemns the use of tax havens and offshore bank accounts by wealthy individuals.

The UK daily The Times reports that in his second encyclical, which is the most authoritative statement a pope can issue, the Pope will argue that tax avoidance and evasion is morally unjust since it prevents governments from collecting revenues to help society's least fortunate people.

The Pontiff's statement is expected to follow on from encyclical Populorum Progressio (On the Development of Peoples), issued by Pope Paul VI four decades ago by calling for the world's economic and trade system to be regulated in such a way as to avoid "further injustice and discrimination," the Times reported.

The Pope's statement is likely to be music to the ears of Italian Prime Minister Romano Prodi, who has made the tackling of tax evasion, widespread in Italy, a high priority.

Prodi, a devout catholic, has previously called for the Catholic church to take a moral stand on the issue of tax evasion. “If memory serves, St Paul exhorted the faithful to obey authority," he told Catholic magazine Famiglia Cristiana.

In a recent letter to Italian news daily Corriere della Sera, Prodi suggested that tax evasion is "the main reason why we have both overly high taxes for honest people and a heavy deficit in the state's balance".

According to the Italian government, the so-called 'black economy' is equal to about 27% of Italy's gross domestic product, although it claims to have made great strides in tackling evasion, claiming a EUR12 billion haul in unpaid taxes last year.

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