LOS ANGELES, CA (Catholic Online) - The government of Prime Minister Mario Monti announced on February 15 that it wants to revise rules on the tax-exempt status of church-owned commercial property. While the exemption also applies to other not-for-profit entities, such as trade unions, political parties and religious groups, the Catholic Church remains its largest beneficiary.

The proposal is an unpopular one, the sign of desperate times. "Such a move would have been unimaginable six months ago," Francesco Perfetti, a history professor at LUISS University in Rome says. "After all, no matter whether you are a believer or not, the church is an integral part of Italy's culture."

Began in 1992, the exemption has long sparked contentious debates. After the Euro crisis and Italy's staggering debt forced the government to introduce sweeping austerity measures, including a sharp rise in the pension age, the taxation issue became even more heated.

Opponents have long said that the current rules give church-owned businesses, such as hotels and restaurants, an unfair advantage over their competitors.

Church officials say that commercial church businesses must already pay taxes in full, and that the exemption is aimed at helping social institutions like schools and hospitals and not at giving the Catholic Church an unfair advantage. "We don't ask for preferential treatment but just to be treated as other not-for-profit entities," Cardinal Angelo Bagnasco, president of Italy's bishop's conference says.

Some Italian church officials have timidly welcomed the government's announcement, saying it would help "clarify" the situation.

Monti took the unusual step of personally explaining the sense and scope of the new rules in a speech to a Parliament committee on Feb. 27. Italy remains one of the most overwhelmingly Catholic nations in the world.

Monti avoided any explicit reference in his statement to the church, and stressed that the government "holds in high esteem the not-for-profit sector's contribution to society."

A trained economist, Monti said the new norms would clarify which commercial properties qualify as not-for-profit in order to avoid possible sanctions from the European Union.

The Salesians, a large religious order, have not welcomed Monti's news. They say they would be forced to close many of the thousands of private schools they operate throughout Italy if forced to pay property tax on them. Other church-affiliated bodies have voiced similar concerns.

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