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Kenyan athletes are now a happy lot after the Ministry of Sports reached an agreement with KRA to end double taxation on their prize money earned while running abroad.
Kenyan athletes can breathe a sigh of relief after the government reached an agreement to eliminate double taxation on their winnings abroad.
The issue of double taxation has been a hot topic among athletes and their representatives as they found it punitive given they pay tax on their winnings in the countries that they run in and also have to be subjected to further deductions when they arrive in Kenya.
According to the Kenya Revenue Authority (KRA), double taxation arises as a result of the overlapping of tax systems of different jurisdictions for example in the United States, where the lucrative Boston, Chicago and New York Marathons are held, athletes pay 30 per cent tax to the Federal Government and another seven per cent in the state where the race is held.
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Upon returning to Kenya, a further 30 per cent is taken by KRA, this despite the athlete paying his or her agent 15 per cent, leaving them with very little for their efforts.
With athletes protesting since 2013 over the issue, their pleas seemed to fall on deaf ears but it appears there is light at the end of the tunnel.
“The government has struck a deal with the Kenya Revenue Authority (KRA) to end what athletes have considered double taxation upon winning any sports competitions abroad,” the Sports Ministry said via a social media post.
“The CS noted that his ministry worked closely with KRA to mitigate the issue for athletes who achieve success on the international stage, with a sole aim of shielding Kenya’s top brand ambassadors and ensuring that their hard-earned winnings are not diminished by excessive taxes.”
Sports CS Ababu Namwamba said the agreement is in line with his ministry’s vision to ensure Kenyan athletes fully benefit from their talents.
“By advocating for this cause, my Ministry strives to uphold principles of fairness and equity, recognising the dedication and sacrifices made by athletes,” said Namwamba.
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“This underscores the government's commitment to realise the Talanta Hela vision of not only celebrating talents but also transforming them into tangible monetary value towards empowering athletes to maximise their potential and contribute to Kenya's sporting legacy.”
Kenya has a number of double taxation agreements with various countries that have set out terms and rules of how income or profits of cross border transactions are to be treated by the two nations so that taxpayers do not end up paying tax twice on the same income.
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