Taxing athletes on foreign earnings still debatable

• By Michael Uugwanga

IN 2019, then Minister of Finance Calle Schlettwein in his budget speech said that the government was looking at taxing athletes for foreign earnings through the Tax Amendment Bill that was expected to be tabled in parliament that year.

The Tax Amendment Bill aims at taxing athletes that make earnings outside the country.

Athletes and musicians eligible to be taxed are those based in Namibia, meaning that foreign-based footballers, boxers and other athletes or musicians will be exempted from the provisions of the bill as they are already paying tax in the countries they are residing in.

Speaking to Confidente, finance ministry’s public relations officer, Wilson Shikoto has said that the bill relating to the taxation of athletes, is also meant to tax musicians but was never discussed, tabled nor passed in the August House.

“Athletes and musicians are taxed on their earnings from inside Namibia in accordance with the Income Tax Act, 24 of 1981 which provides for general taxation of taxpayers including earnings of athletes and musicians arising from athletic, artistic or musical activities. Currently, the foreign earnings of Namibian athletes and musicians are not taxed in Namibia.

“The proposed income tax amendments currently under discussion do not include amendments aimed at changing the system to make foreign earnings of Namibian athletes musicians taxable in the country. The foreign earnings are subject to the tax laws of countries from which such income is earned,” he explained.

Shikoto also said that the line ministry has in the past announced the extension of investigating the possibility of increasing the taxation scope to include residents on their worldwide income instead of limiting the scope to a source-based income, however the proposal has been put on hold and no such investigation has commenced yet.

“The Namibia tax system is by large still a sourced system with deeming provisions where certain foreign income is regarded to be from a Namibian source, but earnings of athletes and musicians on account of athletic, artistic or musical performance activities from outside the country are not included under these deeming provisions,” said Shikoto.

The Namibia Sports Commission (NSC) chief administrator, Freddy Mwiya said:

“For me I am looking at employment point of view and economical point of view of the country. Let us not just talk about athletes but other professions as well. The question is, those other people besides athletes when they make money from outside do they pay tax or not? If you say only sportspeople or musicians are to pay tax from foreign earnings, then we are discriminating,” said Mwiya.

Chief executive officer of the Namibian Society of Composers and Authors of Music (Nascam), John Max said that the issue of taxing musicians and athletes is a universal practice.

In 2013, the Ministry of Finance was studying on whether to tax 2013 Big Brother Africa winner Dillish Mathews who won N$3 million, however such findings did not materialise as there was no such law to tax her.