NAIROBI, Kenya, April 23- The hefty tax bill imposed on Kenyan Premier League champions Gor Mahia has thrown the club into a spin as the management makes frantic efforts to clean its slate with Kenya Revenue Authority (KRA).
Still searching for a sponsor, the last thing K’Ogalo needed was the potential of a debilitating tax bill, reported by local daily, The Standard on Wednesday to be Sh118m that could ground their operations.
Club secretary, Chris Omondi, told Capital Sport the latest financial drawback that faces the most popular club in the country was being addressed between them, the Kenyan Premier League (KPL) and former sponsors Brookside Dairies who severed their relationship at the end of last month.
The development comes as the league champions are set to hold a press briefing on Thursday where they are set to roll out a funds drive among their devoted fans as they continue efforts to secure new sponsors.
The club boss explained K’Ogalo were copied demand letters from KRA addressed to KPL, the custodians of broadcast sponsorship from SuperSport and Brookside on Wednesday.
He also told the club does not levy their players Pay as You Earn legal tax requirement adding “It seems KRA are targeting our sources of income.”
“Our main problem is on the figure and we want to know how they arrived at the amount since Gor is not a profit making organisation and that’s why we are in shock.
“We understand what they (KRA) are trying to do it’s just like the case of athletes but that’s not the right way to approach the matter instead they could have engaged with us before coming to such a huge figure that we have never raised as Gor,” the club Secretary General explained.
Omondi told they are set to meet with KRA next week to discuss the subject in detail and especially know how the amount was reached at since according to them it should be the normal income tax.
“It’s like only Gor who are targeted because other clubs have not received the notice that’s why we are asking why us?” he posed.
To arrive at an estimate figure to surcharge perceived tax defaulters, the taxman computes using payment for example, to Gor players take home each month as the net sum pegged at 70 percent of the gross as the principle.
This is then multiplied by the number of years on their record at KRA before penalties are added.
For instance, a player taking home Sh50,000 per month will be thought to be on Sh65,000 with the Sh15,000 difference as the tax payable. That is multiplied by the number of years the levies have not been remitted plus the accrued interest to get the total bill.
Contacting KPL CEO Jack Oguda, he said K’Ogalo should respond as a club and there is nowhere they come in because their mandate is to disburse broadcast sponsorship funds to all 16 affiliated clubs.
“We are yet to be briefed by Gor chairman Ambrose Rachier, because it’s upon them to give us directions since they are a registered club and we can not tell them what to do.
“We were only approached as an agent and it seems the people who sent the letter to the club have full data but the amount seems to be higher because since we started disbursing money to Gor in 2008, it has not even reached Sh20m,” Oguda told Capital Sport on Wednesday.
He added last year the same issue occurred to AFC Leopards and Western Stima who sorted with KRA on their own.
However, Oguda remained firm that all sportsmen including local footballers should remit their taxes since it’s a required law in the country saying the KPL secretariat staff are also taxed per the rules.
Early this year KRA ordered all sportsmen both local and international must comply with the relevant revenue laws and like other taxpayers, sports persons who are residents should pay their taxes in four equal instalments that on the 20th day of April, June, September and December.
The decision was not welcomed by athletes who compete locally and internationally terming it as double taxation, with some of them threatening to boycott representing the country in international events like World Championships, Olympics and Commonwealth Games among other major competitions.