Knickers twisted

Ritchie and the Tax Justice Network are up in arms that FIFA (the soccer bods) demand that FIFA be free of tax.

This is extraordinary.

Take, for example, the case of South Africa. It has spent a fortune building facilities for the Wold Cup and it seems unlikely that FIFA will be allowing it any return at all.

This is straightforwardly abusive, and abusive in the private interests of an enormously wealthy elite.

Right around the world people should be profoundly disgusted at this abuse of developed and developing countries alike.

Extraordinary, eh?

Following Christian Aid\’s superb report on the use of offshore tax havens in football, we thought we would draw attention to something else unhealthy in the not-so-beautiful game. This is South Africa\’s Revenue Laws Amendment Act 20 of 2006, which football\’s super-wealthy governing body FIFA demanded as a price for allowing South Africa to host the World Cup.

What this Act does, in effect, is to ensure that this struggling African country cannot tax super-profits that FIFA earns.


All of which makes Ritchie and the Tax Justice Network look a little dim really. For international organisations routinely don\’t pay local taxes. It seems to be part and parcel of being an international organisation.

Here\’s HMRC on the tax arrangements for the Olympics in London:

Who is likely to be affected?
1. The London Organising Committee of the Olympic Games Ltd (“LOCOG”,
the company set up to organise the Games), the International Olympic
Committee (“IOC”), and non-UK resident competitors and support staff
temporarily in the UK for the Games.
General description of the measure
2. These measures will exempt LOCOG from corporation tax and will provide
powers for regulations to be made in relation to the IOC and non-resident
athletes and other persons temporarily in the UK to carry out Olympicrelated
business. The powers will allow provision to be made to ensure
that the IOC\’s revenues generated from the Games, income of non-UK
resident athletes from their performance at the Games, and income of
other persons temporarily in the UK to carry out Olympic-related business
will not be chargeable to corporation tax, income tax or capital gains tax.

Here\’s the World Bank on staff taxes:

Under a treaty concluded with the U.S. government when our headquarters was established, foreign nationals are exempt from federal and state taxes on World Bank Group income. U.S. citizens working for the World Bank Group are required to pay federal and state taxes on their salaries. To keep after-tax income in line for all staff members, our salary scale is on a net-of-tax basis; staff members who are liable for income taxes receive a tax allowance. All staff members also pay local property, sales, and other non-income taxes. These tax arrangements are similar to those of other international organizations.

Here\’s the IMF on staff taxes:

Tax Equalization Adjustments

The IMF strives to treat all staff equitably regardless of nationality, a principle which extends to tax treatment. The Fund\’s base salaries in Washington, DC, are paid net-of-tax. However, because some staff members are liable to income taxation on their Fund earnings while others are not, tax equalization adjustments are applied to two potential sources of inequity:

* Tax Allowance for U.S. Taxpayers
Although IMF member countries have agreed to exempt from taxation Fund staff who are nationals of other countries, they may impose taxes on their own nationals. As the United States taxes U.S. nationals on their Fund earnings, the Fund pays a \”tax allowance\” to staff members paid on a net-of-tax basis who are subject to U.S. national, state, or local income tax on their Fund compensation.

Here\’s the OECD on staff taxation:

Emoluments are exempt from taxation in most Member countries of the Organisation, including France.

Here\’s the European Union on the taxation of staff:

As a European civil servant, your salary is not subject to national income tax.

And don\’t forget, this non-payment of local taxation now extends to MEPs as well! Yes, really, since the euro-elections of last year MEPs no longer pay UK income tax on their salaries. They pay the special EU rate, something which saves them around £1,700 a month on their tax bill.

So, there\’s nothing extraordinary about this at all. International organisations routinely don\’t pay the taxes that the rest of us plebs have to pay. International sporting organisations routinely don\’t have to pay the taxes that us plebs have to pay.

Oh, and did you notice the bit where FIFA is a charity? Charities don\’t pay taxes either. As the Tax Justice Network doesn\’t pay the same taxes that the rest of us plebs have to pay….and nor does the Scott Trust (which as we know owns the Guardian).

I do look forward to John Christiansen\’s and Richard Murphy\’s next visit to the World Bank, IMF, OECD and or EU and EU Parliament (and of course Guardian newsroom) you know. I really do.

This is straightforwardly abusive, and abusive in the private interests of an enormously wealthy elite.

They will tell them that, won\’t they?

And send in a cheque for what taxes the TJN doesn\’t pay like the rest of us plebs have to?

2 thoughts on “Knickers twisted”

  1. Maybe I’m just going left-wing in my old age, but I’m sort of on Ritchie’s side over all this. It is a bit bananas that we exempt a lot of organisations merely for being ‘international’. Meantime there’s all sorts of international organisations that we don’t exempt, and plenty of worthy national organisations that we also don’t exempt.

    In the case of embassies, I can just about understand why you might say they’re a special case (because they’re sort of a little outpost of the guest country). But it doesn’t make sense to me to say we tax MPs but not MEPs, even if you respond that it’s just a bit of accounting frippery, given that any notional tax charged is just a grossing-up exercise.

    Anyway, even if you can argue for tax-exempt status I can’t see anything wrong with calling for that to be reviewed. Even if it’s Ritchie doing the calling.

  2. To summarise: they all do it, so it must be OK then. How very lame of you. Now how about marshalling some actual arguments about why this global giant, headquartered in Zurich, should be exempt from taxes in South Africa too.

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