Government tax incentives for sports sponsors welcome
Chinese Ashun Wu (front) receives the Absa jacket from Absa Bank Kenya Managing Director Jeremy Awori after winning the Magical Kenya Open at Muthaiga Golf Club on March 6, 2022.
What you need to know:
- It’s only the private sector can bridge this gap, and only if they are offered incentives such as the ones introduced by CS Amina.
- Just recently, Absa Kenya managing Director Jeremy Awori made it clear that it’s quite easy and convenient for the private sector to partner with government – even more than individual sports federations - if the bottlenecks were eliminated.
Last year, we witnessed intriguing but rather unnecessary turf wars between government and corporates over eyeballs in sports properties.
Most significantly, government officials were fighting for prominent allocation of advertising display space at various competitions, including the European Tour Magical Kenya Open, World Rally Championship Safari Rally and World Athletics Continental Tour Kip Keino Classic, all hosted in Nairobi and its environs.
It was an ugly sight of sponsor branding at the Safari Rally Service Park coming down on the eve of the Safari’s eagerly anticipated return to the World Rally Championship to pave way for elaborate government logos.
At the Kip Keino Classic, similar turf wars were witnessed with government officials eager to outshine lead corporate sponsors, Absa Bank Kenya, in visibility at the MISC, Kasarani meet venue.
Even the official meet programme was quickly withdrawn from circulation, just because it referred to the one-day series competition as the “Absa Kip Keino Classic,” yet, the government side argued, Absa’s Sh20 million vote for the meet was a pale shadow of the government’s Sh250 million sponsorship.
Granted, the government has done quite well in improving sports financing, especially after the constitution of the Sports, Arts and Social Development Fund.
Without such sponsorship, the Safari Rally, whose budget is heading towards the Sh4 billion mark, wouldn’t have qualified for consideration back into the World Rally Championship fold after 19 years in the cold.
That’s why the announcement last weekend by Sports Cabinet Secretary Amina Mohamed that sponsors would enjoy tax breaks on monies voted towards sports sponsorships is most welcome, and couldn’t have come at a better time.
Riding on Section 15 (2) (z) of the Income Tax Act, Cap 470 the CS stated, inter alia, that: “any person sponsoring sports activities must seek prior approval from the Cabinet Secretary responsible for sports on the amount he intends to spend to sponsor sports activities.
“The approval of the Cabinet Secretary responsible for sports shall be communicated in writing to the Commissioner General, Kenya Revenue Authority, at the beginning of the year of income.”
The move by the Cabinet Secretary finally creates an enabling ground for the much sought after private-public partnerships that will go a long way in shoring up sports finances.
It’s obvious that government alone cannot meet the huge financial demands of our sports federations, given the huge demand on the exchequer from other more pressing needs like infrastructure development, healthcare, security, education, etc.
It’s only the private sector can bridge this gap, and only if they are offered incentives such as the ones introduced by CS Amina.
Just recently, Absa Kenya managing Director Jeremy Awori made it clear that it’s quite easy and convenient for the private sector to partner with government – even more than individual sports federations - if the bottlenecks were eliminated.
“As a private sector player who invests significantly in sports, I think it could be a lot easier to partner with government than to partner with sports bodies,” Awori elaborated in an interview on the sidelines of the Magical Kenya Open Golf Championships where Absa Bank Kenya were presenting sponsors.
“Our core business, in our case, is banking. We are taking care of our customers. So if we find that we are to climb up such steep hills to spend our money, then we’ll pick something else somewhere else…”
Transparency will also be key so that unscrupulous individuals don’t cash in on the latest government incentives for money laundering through sports.
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Tonight, Kenya sends out one of the strongest teams yet to the World Indoor Athletics Championships that run in Belgrade, Serbia, from this Friday to Sunday.
The squad of 10 features, for the first time, a sprinter, Ferdinand Omanyala, who is entered in the 60-metre dash.
Other squad members are Collins Kipruto (800 metres), Noah Kibet (800m), Abel Kipsang (1,500m), Jacob Krop (3,000m), Daniel Simiu (3,000m), Naomi Korir (800), Eglay Nalianya (800), Edinah Jebitok (1,500m, 3,000m) and Beatrice Chebet (3,000m).
Travelling officials are Barnaba Kitilit (team leader), Hassan Ahmed (technical leader), Janeth Jepkosgei (team coach), Francis Philomena (doctor), Lydia Muraya and Irene Wamui.
We wish the team success in Belgrade as this will be an important build-up to the outdoor World Championships to be held in Eugene, Oregon (USA) in July and also the Commonwealth Games the same month in Birmingham, England.
This is, of course, besides the Diamond League season and African Championships.
At Nation Sports, we shall give you a blow-by-blow account of these championships, live from Serbia!
