Yes, you did read the headline of this article correctly – offshore tax haven usage is to be condemned by Pope Benedict XVI. According to Vatican sources the Pope has been inspired by Italian Prime Minister Romano Prodi’s calls to spiritual leaders in Italy to help with his crackdown on illegal tax evasion.
As a direct result it is believed the Pope is working on a doctrinal pronouncement to advise the people of Rome and of Italy that illegal taxation evasion and the incorrect and immoral use of offshore tax havens goes beyond breaking the law and it is in fact “socially unjust” and therefore totally against Catholic teachings.
It’s not the concept of taxation optimization through the legal use of offshore structures and offshore tax havens that the Pope is understood to have an issue with, Vatican officials simply advise that in his next papal encyclical the Pope will highlight the fact that high net worth individuals and companies which seek to defraud the Italian tax authorities are in actual fact defrauding their fellow Italian citizens and acting against the benefit of society and therefore going against the teachings of Catholicism.
A popular international argument against the use of offshore tax havens is that they are used by some for the illegal avoidance of taxation and that this naturally reduces available tax revenue that in turn effectively robs our global society. In other words, it is argued that tax evasion creates a situation where there is less money for a nation’s treasury to allocate to supporting the less well off both at home and abroad.
The impending papal encyclical is believed to have at its core a theme of focusing on the world’s social and economic problems in an era when the term ‘globalisation’ is no longer a concept but a reality. It is understood that the pontiff will call for harmonization in global economic, socioeconomic and trade systems so that there is regulation and synchronization to avoid injustice and discrimination.
As part of the development of the theme and the arguments to support it, it is believed the Pope will do what he can to support the Italian Prime Minister in reining in the black economy in Italy from which unpaid taxes are believed to add up to an incredible 27% of the nation’s entire GDP.
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