Nicaragua Taxes Tithes After Closing 1,500 Churches and Nonprofits

A series of policies recently enacted by the Nicaraguan government will significantly impact the activities of churches and ministries operating in the country.

Viewed by religious freedom specialists as an effort to increase the state’s control over religious institutions, the measures impose taxes on tithes and offerings while mandating that organizations create formal partnerships with the Nicaraguan government to carry out in-country projects. Local newspaper La Prensa estimates that taxes on tithes may reach 30 percent.

President Daniel Ortega introduced the bill that was unanimously approved on August 20 by the Asamblea Nacional. Ortega’s party, the Frente Sandinista de Liberación Nacional, which started in the 1970s as a guerrilla group, controls the legislature.

The changes in the law will favor “the development of projects of interest to families and communities within a framework of solidarity and adherence to national laws,” said Vice President Rosario Murillo, who is married to Ortega.

The scope of the new regulations has been vague. Both Murillo and an Asamblea Nacional statement on the bill described the laws as “strengthening transparency, legal security, respect, and harmony.” One likely consequence is that churches receiving foreign money—including funding from their own denominations—will be forced to enter into an alianza de asociación (“partnership alliance”) to access their funds.

The same day the legislation passed, the government canceled the legal status of 1,500 organizations, citing their failure to submit proper financial statements. For the first time since the Ortega administration began cracking down on nonprofits, nearly half of those affected include those with evangelical connections.

That includes a large number of Pentecostal ministries and churches, as well as those run by Baptists, Methodists, Lutherans, and Presbyterians. While a few of the institutions that were affected worked nationally, many were neighborhood churches of less than 100 congregants.

The majority of the other groups affected were connected to the Catholic church. (The rest focused on sports or culture.) As part of the government’s decree, these organizations’ assets will be transferred to the Nicaraguan government.

“Churches, especially the smaller ones, are places where the sense of community and participation is very strong,” said a spokesperson for the Netherland-based Observatory of Religious Freedom in Latin America (OLIRE), who asked to remain anonymous for security reasons. “The government wants to diminish the importance of this contribution so that only the state stands out.”

Last year, these financial reporting requirements led to the closure of ten churches belonging to a Texas-based ministry, Mountain Gateway, and the arrest of 11 of its pastors operating in Nicaragua. Weeks earlier, the group had led a two-day evangelistic and relief event that brought together more than 300,000 people.

However, several laws passed in recent years have created complex financial reporting standards for nongovernmental organizations, resulting in compliance difficulties, according to The New York Times. Even the Catholic church has struggled.

Since 2018, the government has closed 3,390 organizations (10% of them foreign) for “money laundering,” according to the Inter-American Commission on Human Rights. In 2022, the government shut down 20 evangelical churches on similar grounds.

CT reached out to representatives of various Christian organizations in Nicaragua, including some of those whose status had been canceled. Nearly all declined to comment. One source described the situation as “very sensitive.”

“We can even go to prison or lose our citizenship for critical comments,” the person said.

Last year, the Nicaraguan government banned processions and outdoor worship services, citing security concerns after the 2018 protests that resulted in riots and arrests. The government also prohibited the display of symbols such as crosses or the Star of David in front of private homes.

Evangelicals comprise nearly 40 percent of Nicaragua’s 7 million people, making it the third-most evangelical country in Latin America. Many have no issue with Ortega’s actions.

“This is not exactly persecution,” said Ismael Jara, who pastors Iglesia Bautista Sendero de Luz in Ciudad Sandino. “We aren’t banned from going out into the streets and doing evangelism. ... Only mass gatherings are not allowed due to the [political instability that followed the 2018 protests].”

Jara explained that stricter rules for events outside of churches will force congregations to be more organized when planning events. He also suggested that the loss of organization registrations might even be a positive for some churches, pushing them to become more financially transparent to meet the government’s reporting demands.

Additionally, Jara believes it will be healthy for believers to maintain a greater distance from politics. “We have to learn to be neutral and respect the authorities,” he said.

In April, after a group of experts presented a report on religious rights violations at the United Nations, six evangelical organizations—including three church associations, two denominational groups, and a theological studies center—published open letters affirming the existence of freedom of worship in the country. Bishop Aldolfo Sequeira, president at Centro Intereclesial de Estudios Teológicos y Sociales, signed one of the letters, declaring that the government “is respectful of the freedom of worship and expressions of faith of the Christian people, allowing each person to practice the religion of their choice throughout the country.”

Around the same time, the Baptist Convention of Nicaragua published a statement of support for Ortega and Murillo, who have “always supported our evangelistic work and have favored all our activities.”

But those outside the country are less convinced.

Because these shutdowns are “backed by a legislative framework,” the government’s threat to religious freedom is “more evident and more scandalous” than the 1980s crackdown on religious groups by the Sandinistas, or members of Ortega’s political party, the OLIRE spokesperson said.

By revoking registrations and confiscating the assets of religious organizations, the government is forcing these ministries to align themselves with larger groups that are willing to submit to the conditions imposed by the government, explained the representative, who asked to remain anonymous for security reasons. Without a legal registry, they can’t buy land or build a church.

Additionally, the government imposes its goals and policies on Christian organizations in an attempt to “eliminate any presence of institutions that do not share the same political orientation,” according to OLIRE.

In its justification of the legislation passed on Monday, Ortega argued that activities of nongovernmental organizations have resulted in “a discretionary use of [programs and projects] that is not linked to the national plans, strategies, and policies promoted by our good government in the fight against poverty and the security of our population.”

In June, the US Commission on International Religious Freedom (USCIRF) published a report highlighting “severely deteriorating religious freedom conditions in Nicaragua.” “President Daniel Ortega and Vice President Rosario Murillo are using laws on cybercrimes, financial crimes, legal registration for not-for-profit organizations, and sovereignty and self-determination to persecute religious communities and advocates of religious freedom,” it stated.

USCIRF recommended that the US designate Nicaragua as a country of particular concern “for engaging in systematic, ongoing, and egregious violations of religious freedom” and suggested imposing sanctions on Nicaraguan government agencies and officials.

Up until now, the primary source of tension between the Sandinistas and the religious sector has been with the Catholic church. In February of last year, the bishop of Matagalpa, Rolando Álvarez, was arrested on charges of conspiracy and had his Nicaraguan citizenship revoked due to sermons deemed anti-government.

Álvarez was detained until January this year when the government exiled him to the Vatican. Brazilian president Luiz Inácio Lula da Silva’s attempt to negotiate his release led to cooler relations between Brazil and Nicaragua, culminating in both countries expelling the other’s ambassador earlier this month.

In August 2023, a Nicaraguan court ordered the closure and confiscation of the assets of Universidad Centroamericana, a higher education institution in Managua run by Jesuits, at the government’s request. Authorities accused the university of harboring criminal activities during the 2018 protests. The action sparked protests within the academic community and at the Vatican.