Kenya’s Elite Athletes: Africa’s Newest Tax Exiles?

Even Kenya’s Prime Minister Raila Odinga, opposes his own revenue authourity’s plans to impose a tax on the prize money earned abroad by that country’s most successful athletes.

Demoralising Tax

Speaking recently he voiced strong opposition and declared, “It’s a wrong move because the athletes are already taxed whenever they earn after races abroad and taxing them here again will demoralize them”.

http://lowtax.net/asp/story/front/Athletes_Take_Stand_Against_Kenyan_Tax_Authority____58253.html

Is it Double Taxation?

Refuting the Prime Minister’s claim of double taxation the Kenya Revenue Authourity (KRA) issued a statement attempting to reassure athletes that tax demands sent out last month do not amount to double taxation and only apply to money earned abroad based on the difference between the rates applicable in countries where they compete and those applicable in Kenya.

The statement added that the athletes would however have to submit evidence of tax payments abroad to qualify them as deductions against Kenyan tax liability.

Unconvinced.

Despite plans announced by the KRA for a series of awareness raising events targeting existing and potential taxpayers, Minister of Sports Ababu Namwamba still isn’t convinced that it is the right thing to do.

Stressing the value of Kenyan athletes as ambassadors, he urged consultations with these athletes before going ahead and said:

“”The tax man should consider all the factors concerning athletes and tax.These are our gallant heroes who have put Kenya on the sporting map and we should not hurry in imposing taxes on them. They are already paying taxes and taxing their proceeds may not go down well.”.

Has the Exodus Started?

This summer at the London Olympics it did not go unnoticed – least of all by BBC commentators – the number of Kenyan athletes running for other countries, including former world record holder in the 3,000m steeplechase, Stephen Cherono, who ran for Qatar.

In fact, a number of other Kenyans now race for countries in the Middle East, Europe and North America.

Indeed, speaking about an unpaid tax bill for the past 5 tax years he received from the KRA, double world long distance champion Abel Kirui, sounded alarm bells when he opined that the new tax plan could contribute to a further exodus of Kenya’s ‘big names’ to other countries.

He further commented that despite the lack of support by the government Kenya’s athletes had helped place the country on the world map and KRA’s plans to introduce the tax will be discouraging.

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