Mohamed Salah’s 39million pounds move to Liverpool from AS Roma is the latest transfer record for an African footballer. Last year, Sadio Mane’s move to Anfield from West Ham United generated a now eclipsed record by his new teammate.
Apart from the big money transfers involving the duo, Yaya Toure earns a princely sum of around 230,000 pounds every week at Manchester City. The Ivorian has been one of the highest-paid African footballer for many years.
Nigeria’s John Obi Mikel also earns a tidy amount put by several sources at 140,000 pounds weekly at China’s Tianjin Teda while his compatriot Victor Moses has recently moved into the six-figure threshold at Chelsea.
Kenya’s Victor Wanyama is reported by several sources as earning 70,000 pounds weekly, but it could be a little more. Ghana’s Asamoah Gyan was earning 227,000 pounds a week when he moved to Shanghai SIPG a few seasons ago.
Yet, none of these players pay income taxes in their country of origin. As residents abroad, their taxes are paid into the economy of the countries where they play.
The amount of money being made from football by European governments is huge as Ernst & Young estimated that the Premier League paid 2.4billion pounds to the UK tax authorities in the 2013/14 season, with 891m pounds being taxes paid by players. There were 47 African players in the EPL that season and 10 more in the 2016/17 term.
The Swiss-based CIES Football Observatory estimated that Nigeria exported 596 footballers to top leagues around 183 countries in 2016, leading Senegal (377), Cote d’Ivoire (370), Cameroon (366) and Ghana (365) in an African top five.
However, none of these players is required to pay any money to the governments of their country. Most funds that come back to their country of origin are from remittances, property purchase or charity.
Salah made a donation of five million Egyptian pounds ($269,000) to a government-driven endowment fund in his country in January. Odion Ighalo has recently built a charity home while Didier Drogba has been using funds from his image rights to build five hospitals in Cote d'Ivoire.
But many footballers do not pay taxes accruing from their image rights from the sale of merchandise locally while others use holding companies to receive payments from brand and sponsorship rights. Even then, many use shell companies to buy properties which help them to escape paying property tax.
One of the countries trying to benefit from income of its citizens abroad, including footballers and athletes, is Kenya. The Kenya Revenue Authority, in an attempt to make up for a shortfall in financing the country’s budget, turned towards its citizens in the diaspora who work and own property to pay taxes at home. The KRA declared 2017 as a year of amnesty and should proceed to tax them from next year.
It means that Wanyama could be making some remittance to the government coffers from his big salary, which caused a sensation at home last year when it emerged his new weekly earnings could pay annual salaries for two Members of Parliament.
In 2010, South Africa enacted a law that would make visiting sports stars pay 15 percent of their earnings during a competition or event through a withholding tax.
The effort of African countries at raising talents, even though unstructured in many countries, ought to be better rewarded beyond the remittance and charity route.
Unfortunately, it is not one that has come up in many national discussions. Instead, footballers who earn huge sums of money in Europe return home to collect amounts higher than the national average as bonuses when they play for their countries.
Perhaps African countries need to enact laws that would see footballers playing abroad and earning beyond a certain threshold, say above $30,000 weekly, pay some form of taxes back home. Even that, as I have been told by an athlete manager, can be arranged to ensure players do not earn above the threshold while they receive the rest as bonuses.
While they make tons of hard cash at top clubs and own state of the art cars and palatial mansions, can we get them to start making some formal contribution to the national till?
After all, to whom much is given, much is required.
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