In 2016 Virginia Raggi, an unknown lawyer and member of Italy’s anti-establishment Five Star Movement, became the first woman to become mayor of Rome. The ambitious 36-year-old might set yet another record still: to be the first mayor ever to get the Vatican to pay taxes.
The relationship between the Vatican State, which is sovereign under international law, and Italian taxes has been historically murky at best. The Holy See established territories and tax exemptions with the Kingdom of Italy in 1929 as part of the Lateran Accords.
Religious properties were always understood to be exempt from taxation, but whether non-religious and commercial properties belonging to the Vatican should pay taxes has always been a contentious issue in Italian politics and a constant debate in the Eternal City.
Several scandals have emerged concerning Church properties that serve as hostels and hotels in Rome, generating profit while remaining exempt from municipal taxation.
As a general rule, when the finances of the city of Rome go from bad to worse, politicians will look to the seemingly greener grass of their neighbor beyond the Tiber: the Vatican.
Well, the economic situation in Italy and its capital have bypassed worse and reached disastrous. Rome is currently nearing almost $13 billion in debt, with a public transportation system and a garbage & recycling department in competition for which hemorrhages more money and is less efficient.
Raggi was, in large part, elected thanks to her rallying cry to have the Vatican finally pay its dues – or rather “IMU”, the Municipal Property Tax. But will she succeed where so many have failed?
Pope Francis expressed openness towards the issue in September of 2013, stating that “the Church should not transform empty convents into hotels in order to make money.” In an interview with the The Guardian, Raggi went so far as to state that she believed the pope to be a “Grillino,” a term used to define the followers of the leader and founder of the Five Star Movement, Beppe Grillo.
“I think that on this point, we could have a frank discussion,” she said hopefully.
Later in an interview with the Italian newspaper Repubblica, she added that the unpaid taxes on the Vatican’s real estate holdings and other assets would amount to between $270 million and $430 million in revenues.
The amount was overly optimistic, to say the least. A 2008 committee estimated that the total amount due was about $27 million a year. Alas, that’s not enough to salvage the city’s garbage-ridden and ill-connected streets.
A lengthy 2014 dossier issued to the Italian Radicals showed that 1 out of 4 private hotels in Rome belongs to the Church. Religious organizations own 273 accommodation facilities, counting up to 13 thousand beds. The dossier showed that there are only 246 owners, meaning that some may own two or more such establishments.
According to the dossier, 38 percent of these hotels have never paid IMU and 24 percent paid only occasionally. Only 94 out of the 246 hotels paid taxes regularly.
“Discussions have started with the Church regarding the payment of IMU on commercial properties,” said Andrea Mazzillo, the town finances Counselor, who nonetheless called for caution, stating that though they had reasons to be optimistic the road was still long and possibly rocky.
Raggi recently met with the Pope Francis, and allegedly discussed plans for the payment of taxes. To say that the mayor negotiated from a position of weakness is an understatement. Members of her cabinet have been accused of corruption and nepotism and Raggi herself has been recently summoned to court in a case of malfeasance and forgery involving her Chief of Staff and right-hand man, Raffaele Marra.
Still, excitement rippled through Town Hall after the meeting with the pope, and the Counselor for Commerce and Tourism, Adriano Meloni, overzealously stated that “the pontiff has said yes to the mayor Raggi.” The mayor was quick to walk that back: “No one can attribute quotes and statements to the pope. When the pope speaks, he speaks for himself.”
Raggi’s hopes that taxes paid by the Vatican might be the magic wand to make all of her troubles disappear seems to be slipping away. “It would appear that some in the Vatican did not appreciate the attempt to interpret Bergoglio’s thoughts,” said Stefano Incani, secretary of the Union of Rationalist Atheists and Agnostics.
“We are not optimistic regarding the true intention (of the Vatican) to settle its debt with the municipality,” Incani said.
The young mayor will probably attempt to hold a firm grip over her cabinet while still pursuing the Holy Grail of Roman politics: a check signed by the pope. Raggi must be cautious going forward, after all, hers would not be the first mayoral head that Pope Francis has caused to roll.