In La Prensa, Feb 20, 2025
Sources pointed out that churches are being charged up to 30% tax rate on their income, which is mostly offerings and tithes.
The time has come to pay taxes to the regime of Daniel Ortega and the novelty this year is that for the first time in recent economic history of Nicaragua churches, without regard to their denomination, began to pay taxes on the offerings and tithes that they receive, after the reform of the Law of Tax Concertation done in August of last year.
According to knowledgeable sources on the topic, after the start of the process for the declaration of taxes, “all religious associations were elevated to the general regime, and are paying taxes at this time…The churches had been exempted from income taxes throughout the tax history of the country.”
They pointed out that taxes of up to 30% of their income are being applied to churches, which mostly consists in offerings and tithes.
They indicated that due to the fact that religious associations require legal status for their existence, they fall into the general regime and thus not in the fixed quota regime, where the tax burden tends to be lower than the general regime.
“And no one is talking out of fear, neither business owners nor anyone complains out of fear,” explained one of the sources.
Reform in August
On August 21 of last year, quietly and through the repeal of a law, Ortega ordered exemptions be removed from the churches from all denominations, in a packet of reforms which created a new work model for non-profit organizations, where he took advantage to make adjustments to the Law of Tax Concertation (Law 822).
In terms of the reform of Law 822, the dictatorship ordered repealing number 3 of article 32 of that law, which protected churches and other religious institutions from the payment of income taxes from economic activities.
Up until the reform, number 3 of the article referring to the subjective exemptions established that they were exempt from the payment of income tax: “Churches, religious denominations, confessions and foundations which have legal status, in terms of their income coming from activities and goods used exclusively for religious purposes.”
By removing tax protection from the churches and institutions protected by number 3 of article 32 of the Law of Tax Concertation, this means that they, on declaring their income, which includes offerings, tithes, alms and other flows, will be left subject to the payment of income tax, where there are rates of between 10-30%, depending on the annual income declared.
Previously they did not pay taxes
In light of this and other income, because they formed part of “income coming from activities” characteristic of religion, they only used to be declared to the Tax Authorities, but were not subject to the payment of taxes. But when the exemption was removed for religious groups, they became part of the general tax regime, where they now are taxed.
In July 2023 the regime also ordered, in violation of the law, the charge of Property Tax on parishes and evangelical churches, in spite of the fact that executive decree number 3-95, approved on January 31, 1995, included religious institutions within the group of those exempt from that tax.
Collection notifications of this tax were shared among several Evangelical and Catholic churches in the first half of this year, but it was not until the month of July when some religious dared to denounce this illegality under the condition of anonymity, but presented the municipal notification they received.
Not just churches
According to sources, during this tax declaration period for 2024, businesses are also suffering hefty charges on the part of the DGI [General Tax Office].
“This is the reality for businesses and non-profit organizations at this time, and for everyone who are going to present annual income tax declarations, who are being charged taxes with an incredible voracity and under draconian interpretations,” explained one of the sources.
He indicated that currently the “DGI is pursuing businesses that report payments for professional service expenses.”
The DGI this week issued a press release where it reported that the hour had arrived for declaring and paying taxes for 2024.
