The Kenya Revenue Authority is threatening its athletes with a heavier tax imposition on foreign earnings. Known for being the best middle- and long-distance runners in the world, Kenyan athletes already face a heavy tax burden. This recent development has athletes from Kenya contemplating boycotting future international competitions — and possibly even changing their nationality.
The KRA, if its has its way, will institute a 30% tax rate for their athletes, which is the highest bracket in the country. Wesley Korir, who is a member of the Kenyan Parliament in the Cherangany constituency as well as a former Boston marathon winner, claims the athletes would end up paying taxes twice — at both home and abroad. “The breakdown for taxation and deductions is as follows: 30% to 35% for the country of origin, 15% for the agent, 10% for the manager, and now the KRA wants to add salt to injury by slapping a 30% tax of that amount,” said Korir in an interview with Reuters.
The punitive tax requirements (if carried out) could not only keep the athletes from competing in Olympics as a representative of their country — which has long been a point of pride for Kenya — but could eventually lead to a hefty emigration of Kenyan athletes to other countries. “Some countries like Qatar pays Olympic medal in dollars and we are sounding the alarm that KRA may trigger a massive athletes’ exodus,” cautioned Korir.
“When these athletes will stop going to the track to run, in the Olympics or the World Championships, that’s when the importance of an athlete will be felt,” said Korir. That sentiment has found some agreement among current Kenyan athletes, Florence Kiplagat, a two-time world champion told Reuters “If this matter goes on like this, I will defect to another country which will appreciate my effort.”
The initial impetus for the KRA’s new tax law is Kenya’s lack of a tax treaty with foreign countries. Benjamin Limo, the Kenya representative of the International Association of Athletics Federations said, in an interview with Nation Sport, that he believes this to be the source. “All taxes are deducted before prize money is paid. You come back to Kenya and KRA tells you the tax certificate is not valid, as the country that taxed you is not tied to Kenya in matters of tax. Double taxation then comes in,” claims Limo. However, the KRA claims they would in fact account for foreign taxes paid by their athletes before taxing them in Kenya.
This murkiness on this point is precisely what’s at issue. And the lack of lucidity may force athletes to leave if or when they’re offered a better situation elsewhere. This has long been a problem for Kenya.
The Kenyan Ministry of Sports has attempted to halt the defections of athletes like Bernard Lagat, who changed his domicile to the United States and has now become the U.S. record holder in the 1500m indoors and the 1500m, 3000m, and 5000m outdoors.
Saif Saeed Shaheen — formerly Stephen Cherono — was given an alleged U.S. $1 million to become a Qatari citizen after representing Kenya his entire life. Albert Chepkurui, now Ahmad Hassan Abdullah, also became a Qatari, also for a reported hefty bounty. Both runners claim that they’ve agreed to net $1,000 a month from their new country, and not the massive figure that had been reported.
Shaheen, Abdullah and hundreds of other athletes have abandoned their native Kenya over the past decade; the new tax laws Kenyan runners might face could leave even the most patriotic Kenyan athletes with no better option than emigration. With the help of Korir, perhaps Kenyan runners will be compensated fairly and can continue to represent the country that has become the cream of the crop in distance running. “We are going to form our union in the next couple of weeks,” says Korir. “This will help us fight for our rights.”