Is our Sports industry tax ready?

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Sports was for ages meant for recreational purposes but there has been a big shift with time. The industry has evolved into a multi-billion-dollar industry that employs the masses and brings in revenue for governments thanks to capitalism.

Uganda as a third-world country is still struggling to reap big from sport despite notable achievements ticked over time in different disciplines on the local and international stages. Considering the state of our economy, we are desperate for opportunities meant to elevate us into a better place. Ugandan sport suffers a catalogue of hiccups but the biggest stumbling block remains adopting a mindset that caters to change. It is no secret that some of the most famous and wealthiest individuals on earth are key stakeholders in the sports industry as athletes or proprietors.

A quick scan through countries with thriving sports industries shows a familiar trend. Individuals or communities start these sports clubs as social projects but later introduce policies and structures that enable them to generate revenue thus their success stories and sustainability.

Kaithleen Noble has represented us in the rowing event at the Olympics on two occasions but I can imagine how much her equipment costs. The same appliesto Charles Kagimu who became the first Ugandan to ever complete in an Olympic Road race in the Paris Games. Equipment needed for such disciplines is quite costly which doesn’t make matters any better when Uganda Revenue Authority (URA) imposes high taxes on importing them. Then how are we going to groom more athletes to represent us at such events? The Athletics lot got a breather when President Yoweri Kaguta Museveni waived taxes off their prize monies and further assistance rendered. This has seen legends like Moses Kipsiro, Stephen Kiprotich and Joshua Cheptegei groom more talent in their hometown of Kapchorwa, construct running facilities, and offer training to the upcoming athletes in the region with help from their agency, the NN Running team from the Netherlands.

Majority of the sports academies in the country register as NGOs rather than companies because children hardly pay training fees to keep them running, they struggle and barely break even after five years thus opting to collect donations for continuity. On registering the academy with URSB and URA, NSSF is already knocking on the door to register your employees even when you run the entity as an individual. Then you are expected to file and remit returns like any other business that has run for years which is quite depressing. Most of these grassroots coaches hardly survive to make ends meet but dig deep to run their academies.

There is no reason we should be taxing our sports clubs when they can hardly clear staff salaries. What are you taxing?  First and foremost, local sports clubs need restructuring. They should belong to communities as their backbones. This can help generate income when local fans purchase tickets to watch these games on top of attracting sponsorships to steady ship. All these parastatal sports clubs are doing quite a commendable job but you can’t ignore the fact that it’s more of Corporate social responsibility than running a sports business.

For example, not many UPL sides can attract big numbers on matchdays. A handful, including KCCA FC and Vipers SC, can boast of near full stands. The likes of URA FC, Police FC, UPDF FC among others cannot say the same. It would make more sense if these institutions sponsored the sports leagues and put money into community sports clubs rather than having their own. Let’s first focus on how we can get people into sport through mass involvement then later make things formal rather than the other way round. Subsidize taxes on sports equipment imports and donations to facilitate capacity-building, in the long run, the industry will stabilise to groom talent for export to get back returns on transfers.

Written by

Lewis Ainebyona

Mr Lewis Ainebyona is a Football Studies Graduate. Solent University, Southampton and Grassroots coach

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