FIFA’s muscle flexing
Posted by John Beech on May 13, 2010
Given that both tax and transparency are very much flavours of the month in football, it’s surprising that an item on England’s bid for the 2018 World Cup should have provoked so little reaction (1). In a nutshell, FIFA are demanding that the World Cup should be tax exempt in any hosting country:
“Any host country requires a comprehensive tax exemption to be given to Fifa and further parties involved in the hosting and staging of an event,” said a Fifa spokesman.
Apart from the obvious need for this posting to gain a ‘Chutzpah’ tag, one must wonder why FIFA, a registered charity, should see the need to gain exemptions for ‘further parties’, i.e. players.
No doubt FIFA would argue that a) they need to get the best deal they can and b) in some potential host countries (Qatar seems the most obvious example) the personal income tax rates are considerably lower than in England.
True, but it strikes me that FIFA are really rather getting above themselves in dictating tax arrangements in foreign countries. They bemoan governmental interference in football, as they have recently made clear by threatening to suspend El Salvador (2), yet apparently feel it perfectly acceptable to interfere with the running of sovereign states.
As if this in itself is not shocking enough, FIFA also insist that such interference remain confidential!
Do they involve relieving the players, possibly even those already resident in the UK, from paying tax on their incomes?
“I’m not able to tell you,” said a spokesman for the England 2018 bid team. “Fifa requires it [the technical bid document] to remain confidential.”
But he stressed that this applied to all conditions, including those applying to visas, work permits, travel, security, banking and foreign currency, commercial rights and broadcasting.
“It is not a selective confidentiality,” he said.
A spokesman for the Department of Culture, Media and Sport (DCMS) said: “I can’t go into detail of any of that because Fifa have very strict confidentiality clauses – but there is always room for manoeuvre.”
It will be interesting to see how our new government addresses this issue as it begins to tackle the budget deficit. Time for change I would have thought.
The practical problem in all of this is that, if the UK and other governments with conventional income tax regimes dig their heels in, FIFA may choose just to place the World Cup in oil rich nations in air-conditioned stadiums (see More stadium madness), which would be another step down the road of the Harlem Globetrotterisation of football.
[For an interesting personal view of the way FIFA operates, those who haven't seen it may find Andrew Jennings' Transparency in Football website of interest (now added to my LINKS page.]
UPDATE – 14 May 2010
Cameron has phoned Blatter and said the new government will do “everything in our power” to help the England 2018 bid (A), presumably including facilitating tax avoidance. HMRC will be pleased.