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Taxman tightens noose on sports stars

22 January 2014, 08:17

Nairobi - Top Kenyan sportspersons are set to feel the squeeze on their income after the country's taxman published an order on Tuesday demanding them to pay levies on their earnings.

Kenya Revenue Authority (KRA) revived the controversial plan of taxing the earnings of the country's sporting talented that sparked a huge row especially among distance running luminaries who are set to be most affected.

In a press release, the authority that collects 93 percent of the government revenue spelled out modalities to be followed by sportspersons when remitting their taxes to the State.

"Where sports income is earned overseas by a sportsperson who is a resident of Kenya for tax purposes, such income is considered to have accrued in or to have been derived from Kenya and is therefore taxable in Kenya."

"However the tax paid overseas is offset against the tax computed locally on the income earned overseas as provided under section 39(2) of the Income Tax Act," KRA stated.

"The sportsperson should however furnish evidence of tax paid overseas in order to be allowed to offset it against tax computed locally," the taxman stated.

"Where the sportspersons use their earnings to pay sports managers and agents who are non-residents, they should deduct withholding tax at the rate of 20 percent of the gross amount payable and pay the balance to the manager or agent."

While providing an online portal on their website, for athletes to visit for guidelines, the revenue collector urged them to abide by the laws of the land by ensuring they remit their dues.

Event organizers will also be required to remit taxes on events as spelt herein.

When initial plans to levy earnings were rolled out in 2012, top runners who have invested heavily back home from earnings overseas complained it amounted to double-taxation since they were also levied for their businesses.

Speaking in 2012 when the plans first came to light, Olympics silver winner and 2011 double world champion, Vivian Cheruiyot said: "This is very unfair. We have used much of our earnings to contribute to the Kenyan economy. We bring money home to put up investments, which are already heavily taxed by the government."

Record holder, David Rudisha and two-time world marathon champion, Abel Kirui, were among a horde of stars who vehemently opposed the taxman's scheme.

- Xinhua


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