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Friday, January 6, 2012 / The Standard

Hunt for Sh1.2m jackpot set for Kisii tomorrow

By JOSEPH NGURE
Athletics Kenya calendar of activities resume tomorrow in Kisii where Sh1.2 million await those in the hunt for the Kenya Commercial Bank AK crosscountry jackpot since November last year. The seven-leg series will come to an end at the athletics-rich Nyanza North town where 21 athletes will be chasing double glory as they jostle for the share of the jackpot after amassing points in the six previous races. When the race kick off in the serene hilly course, the 21 contestants would be aiming to nish in better positions to add points since the format of rewarding the winners was revised. From the Tala in Kangudo to the sixth leg in Sotik in the South Rift, Nicholas Togom, Linus Chumba, Timothy Kiptoo, Wilson Too and Simon Ndirangu have dominated in the senior mens 12km after nishing in the top seven positions more than once.

AGENTS SCARED

Leading tax lawyer Thomas Kirui (left) and athletics agent in Eldoret Gianni Demadona. [PHOTOS:FILE/STANDARD] By OMULO OKOTH
The proposal by a senior Kenya Revenue Authority that athletes agents should pay taxes locally elicited rage and excitement from the sporting world. One of the leading agents with a training camp in Eldoret threatened to close down his camp, saying it did not make sense because he paid his taxes in his home country and did not see the need of paying taxes here. A camp is just to help the athletes train together and is not the base of the management, Gianni Demadona, an Italian who manages top Kenyan athletes, told FeverPitch in an email. Im an Italian citizen and I pay the tax in Italy....so if the question is that I have to pay the tax in Kenya the answer is that its not possible......the base of my activity/ofce is in Italy and not in Kenya. The training camp is just to allow the athletes train together. If the problem is the training camp it means that we can close it and Ill have less

Proposal that athletes agents should pay taxes locally elicits mixed reactions
expenses and the athletes will not have any benet, said Demadonna. A very simple solution for me....I close the camp and I have no problem...but this will only penalise the athletes (normally the new ones that dont have money to buy or rent a house, he said. Other top managers like Ricky Simms, Federico Rosa and Marc Corstjens have not reacted despite being sent questions. Leading tax lawyer Thomas Kirui and KRA Senior Deputy Commissioner Kennedy Onyonyi have said foreign agents who are not tax residents of Kenya should pay tax to the extent their income accrue in Kenya and in accordance with the double tax treaty, if any, that Kenya has with their countries of tax residence. The double tax treaties are: 12.5 per cent (UK), 15 per cent (Germany and Canada), 20 per cent (Denmark, Norway, Sweden and Zambia), 17.5 per cent (India), 20 per cent (France) but should pay tax in accordance with the resident individual and corporate rates. According to gures by Association of Road Race Statisticians (ATTS), Kenyan athletes earned almost Sh1 billion last year. Even though the runners are generally subjected to substantial tax withholdings (30 per cent in the US, for instance) the agents calculate their commissions from the gross and not the net earnings of the runners. Further, agents are not subjected to tax withholding on their commissions in countries the runners get paid in. Kirui agrees that athletes should be exempted from paying tax because of their role in publicising the country, but he insists that they should still declare their income. As to whether they should be exempted from paying tax, which makes perfect sense, that is a sovereign decision. But they should le their returns like other Kenyans, says Kirui. It will, however, be difcult to establish the amount of income the agents earn from the athletes without KRA rst im-

SECOND LEG
Togom won the second leg in Eldoret, while Chumba, a soldier, nished second twice in Embu and Nyahururu. He was sixth in Eldoret. Timothy emerged victorious in Mt Elgon after taking second position at Chepkoilel in Eldoret where the second leg took place with Too and Ndirangu nishing sixth and seventh and fth and fourth in Embu and Nyahururu respectively. In junior men 8km, Japhet Korir won in Kangaru, Embu after nishing second in Eldoret to top the class that will also be contested by World 3,000m champion Wilson Sitonik Malel who has an equal number of points as a result of winning in Eldoret and coming second in Embu. Others ghting out in the junior men include Johana Maina, the third nisher in both Embu and Nyahururu and Bernard Muia who was sixth and fourth in Embu and Nyahururu. They are joined by Ernest Ngeno, who is in the nal contest after ranking fourth in Embu and fth in Eldoret and in Nyahururu. The battle in the senior women 8km will be focused on favourite Phanancier Jemutai who is leading the category with the maximum two points after winning in Chepkoilel and in Kapsowony in Eldoret and Mt Elgon. Jemutai will be challenged by Farida Chelanga who managed Position 2 in Eldoret and Nyahururu. Chelanga has collected 4 points from the two meetings.

ELITE RUNNERS
Kenya elite male runners earned $6,962,635 (Sh591,823,975) while the women earned $3,021,490 (Sh256,826,650) for a total of $9,984,125 (Sh848,650,625). The total for 2010 was $7,963,710.00 (Sh653 million). Approximately 25 per cent of a runners gross earnings go to the agents as management and training fees. This easily puts all the resident agents in the 30 per cent tax rate and so KRA is missing out on millions in tax payments.

posing an income-reporting requirement on the athletes themselves and then requiring the agents to le tax returns. A KRA Tax Clearance Certicate should, therefore, be one of the pre-requisites to the agents annual licensure by AK. Their Kenyan-source income represents a substantial tax base that has avoided KRAs radar since races began offering prize money in the 1980s. The brand new Mutual Legal Assistance Act can be a valuable tool for Kenya with regards to international tax information, he says. I am yet to learn of a race or sports company that does not report their payments in form of prize money etc to their tax authorities - be it the Internal Revenue Service (IRS) in the US or Her Majestys Revenue and Customs (HMRC) in the UK, he says. The KRA has been in the eye of a storm following recent revelations in Parliament regarding Mr Mugo Matemus failure at KRA to collect Sh2.4 billion in tax arrears from Kingsway Tyres Ltd despite obtaining a court order.

FKF condemns violence at Homa Bay tourney

By FEVERPITCH REPORTER
Football Kenya Federation (FKF) has condemned acts of hooliganism witnessed at Homa Bay Municipal Stadium on January 1 where a boy was shot by the police and a Standard Group correspondent James Omoro beaten while on duty during a football tournament. FKF Nyanza North National Executive Ofcial Tom Alila said it was such barbaric acts that prompted the federation to insist that anyone organising a tournament must notify FKF to ensure there is order. I condemn in the strongest terms possible the acts of hooliganism displayed at the Homa Bay Municipal Stadium where a politician, who sponsored the tournament, promised to give a large amount of as prize money only to reduce the money, thereby triggering the violence, he said. This explains why the federation (FKF) asked those organising football tournaments to liaise with the football body so that the tournaments are organised professionally, Alila told FeverPitch. That way, the prizes would be given by the football running body and no one would feel aggrieved, he added. Alila said the organiser of the said tournament should ensure he pays hospital bills for those injured during the tourney. Milton Orwe, FKF Secretary General Nyanza South said the organiser erred by promising the teams big money only to fail to honour his promise.

PRIZE MONEY
There is no way one can promise to give out Sh100,000 as prize money and end up giving out Sh20,000. The organiser should have followed the right channel. That way, the tournament would have not witnessed such ugly

Tom Alila

scenes, he said. Nyanza South FKF Branch Chairman Phillip Owuoti said he had no knowledge of the tournament and the branch may consider taking legal action against the sponsor if he does not meet the medical bills for those injured during the tournament. The sponsor must ensure he pays the medical bills for those injured during the fracas as he did not follow the right channel, said Owuoti. The football ofcials, led by FKF chairman Sam Nyamweya and his deputy Sammy Sholei, were speaking in Kisumu after touring Moi Stadium.