Up to 30 Per Cent of Their Income: Nicaragua Ends Churches’ Tax Exemption

• Nicaragua repealed the law exempting churches and religious bodies from tax
• They now face income tax of up to 30 per cent of annual income
• The government also shut 151 more NGOs, days after closing about 1,500
• More than 5,200 civil organisations have been dissolved since 2018

Nicaragua has ordered churches and other religious entities to start paying income tax, removing an exemption they had long enjoyed, AFP reported in a story carried by the Jamaica Observer. The resolution to “repeal” the exempting law was published in the official La Gaceta newspaper and signed by President Daniel Ortega.

Under the change, religious organisations will have to pay tax of up to 30 per cent of their annual income. The same announcement shut down 151 non-governmental organisations, most of them international and sectoral chambers of commerce. That came three days after the government closed some 1,500 NGOs, a move the opposition in exile called an “attack against civil society”.

The measures are part of a wider crackdown that began after protests against Ortega’s government in 2018, which the United Nations said were met with a response that left more than 300 people dead. Hundreds of critics, real and perceived, have been jailed since then, and more than 5,200 civil organisations have been dissolved. Ortega, who first led Nicaragua as a junta head in 1979 and returned to power in 2007, is under United States and European Union sanctions.

The report did not say how the tax would be assessed on church property, collections or other income, or how the government would enforce it. The immediate effect, however, is that every church, ministry and faith charity in the country now carries a tax bill it did not have before.

For Jamaican readers, the story shows how much a church’s finances depend on its tax status. Jamaican churches get relief on property tax and other charges, and those arrangements are occasionally questioned at home. Nicaragua shows that a tax break a church has taken for granted can be removed quickly. A tax of up to 30 per cent on income changes the sums behind every building fund, mortgage and maintenance plan. Congregations that own land and buildings should keep proper records, know which exemptions they rely on, and plan as though those exemptions could one day be reviewed.

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