Saturday, August 11, 2007

Pope set to declare income tax evasion 'socially unjust'

Pope Benedict XVI is working on a doctrinal pronouncement that will condemn tax evasion as “socially unjust”, according to Vatican sources.

In his second encyclical – the most authoritative statement a pope can issue – the pontiff will denounce the use of “tax havens” and offshore bank accounts by wealthy individuals, since this reduces tax revenues for the benefit of society as a whole.

It will focus on humanity’s social and economic problems in an era of globalisation. Pope Benedict intends to argue for a world trade and economic system “regulated in such a way as to avoid further injustice and discrimination”, Ignazio Ingrao, a Vatican watcher, said yesterday.

The encyclical, drafted during his recent holiday in the mountains of northern Italy, takes its cue from Pope Paul VI’s encyclical Populorum Progressio (On the Development of Peoples), issued 40 years ago. In it the pontiff focused on “those peoples who are striving to escape from hunger, misery, endemic diseases and ignorance and are looking for a wider share in the benefits of civilisation”.

He called on the West to promote an equitable world economic system based on social justice rather than profit.

This week the Italian centre-left Government of Romano Prodi began a concerted crackdown on tax evaders, saying that it would target individuals with second homes and other signs of “conspicuous wealth”. If the black economy is included, unpaid taxes amount to 27 per cent of Italy’s gross domestic product.

Mr Prodi, a devout Catholic, urged church leaders to speak out on tax evasion, telling the Catholic magazine Famiglia Cristiana that a third of Italians heavily evaded taxes, which were needed to plug Italy’s huge budget deficit.

“Why, when I go to Mass, is this issue almost never touched upon in homilies?” Mr Prodi asked, adding: “If memory serves, St Paul exhorted the faithful to obey authority.”

As part of its crackdown the Government said that it was seeking taxes on undeclared earnings of €60 million (£40 million) by Valentino Rossi, the world motorcycling champion

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