The Internal Revenue Service (IRS) is claiming at least $349,000 from the earnings of the 23 players of the senior national team, the Black Stars, who participated in the just ended football World Cup in South Africa.
The amount constitutes 10 per cent tax on the publicly known earnings of the players in respect of appearance fees, winning bonuses and the “thank you” package announced by President John Evans Atta Mills on their arrival back home.
In all, each member of the 23-member squad pocketed at least $152,000 from appearance fees ($70,000), winning bonuses for the three group matches ($45,000) which were paid in full, although the team drew-one match with Australia and lost another to Germany,$17,000 as winning bonus at the one-sixteenth stage and the $20,000 handshake from the government.
Information on the total allowances earned by the technical and management teams of the Black Stars, as well as officials of the Ghana Football Association (GFA), during the tournament is very scanty, but the IRS, is pursuing tax revenue from those earnings as well.
Until now, the issue of whether or not players of the national football teams should pay income tax on the huge bonuses they receive during international competitions has been a discreet subject often parried away from public discourse.
Public opinion on the subject is also divided, with some people suggesting that the bonuses of the players should not be taxed in view of the enormous joy and high-profile international image that their successes bring to the nation.
Others, however, insist that the sportsmen and their officials must pay tax on their bonuses, considering the fact that public workers who earn far less incomes are required to pay tax.
And when the Daily Graphic confronted the IRS with the issue for clarification yesterday, the national tax collector made it clear that the incomes earned by the players and the officials of the Black Stars from the just-ended Worlds Cup would attract the appropriate income tax.
According to a Chief Inspector of Taxes, Ms Zenabu Yakubu, the IRS has already requested the Ministry of Youth and Sports, as the withholding tax institution for the service, to endeavour to make the tax deductions in respect to the earnings of the players within the stipulated period, failing which the ministry would suffer penalty.
Section 8(1)(2) of the Internal Revenue Act, 2000 (Act 592) states in part, “A person’s income form an employment is that person’s gains or profit from that employment; the gains and profit from an employment of a person include any allowances or benefits paid in cash or given in kind to, or on behalf of that person from that employment…..”
Ms. Yakubu said unless otherwise exempted by law, any income earned in the country was subject to tax, adding that with respect to the national teams that was not the first time.
She said players of the national teams, had paid tax on their bonuses and other earnings anytime they participated in competitions, adding that before the Black Stars left for South Africa, the Commissioner of the IRS wrote a letter to the Minister of Youth and Sports, Ms. Akua Sena Dansua, reminding her of the obligation to withhold taxes on the bonuses and other earnings of the team.
Ms. Yakubu said the initiative by the Commissioner was to avoid a situation where the Ministry would later plead ignorance of that obligation. She said the IRS had audited the accounts of the Ministry and the GFA in the past and where it felt short in terms of the payment of withheld tax, they were made to pay the appropriate penalty.
Source: Daily graphic