THE CHURCH yesterday insisted it paid its taxes, a day after a bitter war of words with the government over the issue.
“In 2007 and 2008 we paid €26 million in taxes (capital gains and immovable property tax) without accounting for the VAT,” Church chief auditor Yiannis Charilaou said.
On Tuesday, Archbishop Chrysostomos called President Demetris Christofias a liar and a populist over the latter’s call for the Church to pay its taxes.
The government responded through its spokesman, Stefanos Stefanou, who described the primate as an embezzler of public money and accusing him of living in opulence with the money of the Church and the faithful.
Speaking on state radio yesterday, Charilaou said he was saddened and surprised to hear Stefanou launch a personal attack against the Archbishop with “backstabbing and lies.”
“Mr. Stefanou’s position about the Archbishop’s personal life has nothing to do with taxation and the least we expect from Mr. Stefanou is an apology,” Charilaou said.
He said the Church pays its capital gains and immovable property tax whenever it sold land and it also paid VAT on all purchases it made.
It also pays company tax – because many activities are done through companies – and it pays if it has income from dividends and interest rates, Charilaou said.
But it does not pay income tax on revenues that do not stem from its companies, like renting premises.
“There is no income tax – though we are covered by law – even if we wanted to pay, our tax exempt operating expenses are much higher than the taxable income,” Charilaou said.
He said the law on income tax exempted the Church.
“Apart from the constitution, that, in our view, covers us in general, we are also covered by the law on income tax – which exempts religious institutions,” Charilaou said.
He said if the state changed the law and removed the Church from the religious institutions then they would comply.
Auditor-general Chrystalla Yiorkadji said the constitution did not exempt the Church from taxation.
Stefanou yesterday pointed out the 2008 auditor-general’s report which said that the Church owed the state around €169 million: €138 million in immovable property tax and €30 million in capital gains tax.
The previous administration had had discussions with the Church leadership in a bid to resolve the issue and a preliminary deal had been reached, according to the Archbishop.
But that deal was never tabled before the cabinet for approval and the auditor-general said it was unfair to the state as it wrote off tens of millions in past dues and privileges were restored.
