Sabastian Sawe: Millions Kenyan Marathoner Will Be Taxed After Historic Sub-Two-Hour Race in London

Following his historic victory at the London Marathon, world marathon record holder Sabastian Sawe has been receiving cash rewards but he is also set for a massive tax bill.

The Kenyan star made history on Sunday, becoming the first athlete to complete an official marathon in under two hours, when he clocked 1:59:30 in London and surpassed the previous record (2:00:35) held by the late Kelvin Kiptum.

Sawe is guaranteed at least Ksh31.3 million being a winner’s prize of $55,000 (Ksh7.1 million), world record bonus of $125,000 (Ksh16.1 million) and $25,000 (Ksh3.2 million) for breaking the course record which had stood at 2:01:25 before Sunday’s race.

Further, Sawe, alongside Kejelcha, Kiplimo and Amos Kipruto, who finished fourth in 2:01:39, will share a $150,000 (Ksh19.3 million) bonus for running under 2:02:00, meaning his share is $37,500 (Ksh4.8 million).

That will take Sawe’s total prize money to $242,500 (Ksh31.3 million) but the amount could rise up to $1 million (Ksh129 million) if you combine prize money, appearance fees and performance bonuses due to him, not just from the race organisers, but from his sponsors.

On Thursday, he was also awarded Ksh8 million by the government, broken down into Ksh5 million for breaking the world record and Ksh3 million for winning the race.

Based on these potential earnings, it is estimated that the Kenya Revenue Authority (KRA) could collect as much as Ksh30 million in taxes from the athlete who might also face the issue of double taxation.

The significant tax liability has sparked a conversation among Kenyans an also made its way to the Senate where Nandi Senator Samson Cherargei argued that the athletes should be spared from the taxman.

“Sabastian Sawe is winning Ksg48.5 million in awards but KRA is taking Ksh18 million in taxes. KRA should zero-rate. Why take Ksh18 million?” he posed on the floor of the Senate. “I want to appeal to KRA not to tax the winnings of our athletes.”

According to British tax laws, non-resident elite athletes are subject to a 20% withholding tax in the UK on prize money and bonuses. This is the percentage Sawe will leave behind when his full earnings are finally wired to him but it does not end there.

When the money lands in Kenya, KRA taxes athletes’ income at a maximum of 30%. However, to avoid double taxation, athletes who have paid taxes in excess of 30% in foreign nations are exempted.

In Sawe’s case, he will still pay withholding tax to KRA, but a lesser percentage, since he has already been taxed abroad which could take it to over Ksh30 million if he commands the $1 million sum.