Monday, July 19, 2010

(Part two of a series)

SOME Caribbean territories, including Jamaica, are moving vigorously to pull cricketers who play the game on the regional and international stage into their tax net.

Pat Rousseau

Like track and field athletes and footballers, cricketers have the potential to earn comfortable salaries, but historically, they have not been required to pay taxes on those earnings.

Former West Indies Cricket Board (WICB) president, Pat Rousseau, said that the taxing of West Indies cricketers was not something that he was aware of during his time as head of the Board, which enjoyed its best financial position under the Jamaican lawyer's tenure. "It was left up to the individual countries to decide. I don't think that there was any pressure on them to pay taxes, because for many years their income was not that good. It's only now that the income has got good," Rousseau said.

While he served as Jamaica's leader, in the first instance from 1972 to 1980, former Prime Minister Michael Manley, the self-professed best lover of cricket, officially exempted Jamaican cricketers who represented the West Indies from paying taxes. If was felt that the glory that they brought to the region warranted reward in the form of tax breaks. These days, however, high earnings associated with the game, coupled with the low success rate, have some calling for cricketers to fall under the tax axe.

The West Indies Cricket Board (WICB) did not confirm the reports with regard to the other territories, but said that there were plans afoot in Jamaica. "I am not sure," said WICB media relations officer, Philip Spooner. "I believe that the Jamaicans have either started to pay, or arrangements are being made to have them pay. "I am not sure which other country has started to ask cricketers to pay taxes," he said, promising to get additional information. Operations officer of the Jamaica Cricket Association, Courtney Francis, told the Observer that as far as he was aware, there were cricketers who represent Jamaica and the West Indies who do pay taxes. Francis said that Jamaica's cricketers who participated in the historic Stanford 20/20 match as part of the West Indies team against England in 2008 and who had earned US$1 million each, were contacted by Jamaica's tax authorities. "I remember some of them coming to me saying that they had got correspondence from the tax office about the Stanford money. The tax office wrote to them and the correspondence was forwarded to the WICB, because payment was made through the Board. "Those persons were required to pay taxes on their earnings. I am not sure if they paid taxes, but I know that one of them had gone down to the tax office to make enquiries," Francis said. West Indies captain Chris Gayle, fast bowlers Daren Powell, now in England playing county cricket for Lancashire County Club, and Jerome Taylor, were the other Jamaicans who earned US$1 million for the victory over England.

Up to the start of the four-day championship in January 2009, regional cricketers were getting US$279 per match, a figure that would increase in accordance with West Indies experience. The team captain's rate was higher. However, a strike led regional administrators to revise the fee structure across the board, resulting in a minimum US$1,300 (presently worth J$111,800) per four-day match. For one-day regional matches, the fee moved from US$300 per match at the start of 2009, to the present US$700 (J$60,200) minimum. Fees for the inaugural regional 20/20 championship, which begins later this week in Barbados, were not available.

Jamaica's cricketers who went through a full season of regional four-day, one-day and 20/20 matches, would therefore be eligible to earn up to a minimum of J$670,800 for a season of six four-day matches based on the present fee structure; a further $301,000 from five one-day matches if their team makes it to the final; and even more from the 20/20 competition, which replaces the Stanford 20/20. The cricketer's ability to earn up to J$1 million and more in some cases, would push them well over the tax threshold, which moved to $441,168 on January 1 of this year.

While West Indies cricketers do not pay taxes consistently, employees of the West Indies Cricket Board were required to pay taxes when the Board was headquartered in Barbados. Lester Bird's Antigua government at the time offered the WICB tax free status and the Board moved its headquarters to that Caribbean island during 1994.

David Simmonds, Barbados' attorney general and minister of justice at the time, upon hearing that the WICB would move its headquarters to Antigua because of taxation issues, turned up at the Hilton (Barbados) hotel the morning after the decision was taken to move the Board's headquarters to Antigua, with a letter promising the Board duty-free status in Barbados, if it stayed. However, delegates had already decided on the shift to Antigua. "The WICB paid taxes to the Barbados government and that was one of the reasons they left," attorney-at-law and former President of the WICB Pat Rousseau told the Observer.

"It was also the key factor in the ICC (International Cricket Council) leaving the UK (for Dubai). It is not fair for one territory to collect taxes from a WICB with 14 sovereign members. The WICB is now incorporated in a tax-free location and is exempt from taxes," Rousseau said."I have no problem with cricketers paying taxes," Francis said. "We are all paying taxes. They are doing a job and they are using the same services that taxes are being used to provide." Similarly, Rousseau said that he was not against it in principle, but felt that a special payment structure should be put in place for professional sportsmen and women.

"They have a limited income life. I think that they should pay, but there should be a special structure. In a lot of sports, the average career is 10 to 12 years. In that period, at any time injury can terminate income. There should be a percentage of the income that is not taxed that goes into something like a pension fund, which would be tax-free as long as it is not touched for a long time. "I don't take a view that you should just tax them like that. Sometime ago the US Government allowed the deferral of taxes paid by boxers for four years, because their careers could end in five years and they could end up with nothing," he said. West Indies international cricketers are among the highest paid of all workers in the Caribbean. Earnings per annum can range from a low of US$100,000 to over US$1 million, depending on matches played, endorsements sealed and incentives gained from sponsorship.

Among the highest earners are veteran batsman Shivnarine Chanderpaul of Guyana, Jamaica's Chris Gayle, Trinidad & Tobago all-rounder Dwayne Bravo and his countryman Kieron Pollard, one of the world's most sought-after 20/20 cricketers. Their earnings, however, do not come remotely close to those of other international cricketers, including India's captain Mahendra Singh Dhoni, who Forbes Magazine said earned US$10 million last year. Dhoni recently signed a three-year advertising deal that will fetch him a further US$40 million over the period and pushes his annual earnings even higher than the world's best batsman Sachin Tendulkar, who previously earned close to US$8 million per year on average, including one year in which he made US$15 million, which included some one-off promotions. Dhoni is now associated with 18 brands, among them Pepsi and General Electric.