23 November 2012

Namibia: Shooting From the Hip - Taxes, Sponsorships and the Future of Sports


THERE is a concept in economics known as the "physical limit of taxable capacity". The physical limit of taxable capacity is the point beyond which people and businesses are discouraged from going ahead with their productive efforts.

It might be a tax rate of 20%, 40% or 60%, but the actual level will depend upon what taxpayers perceive as the return on their tax payments. Government policy makers would do well by starting to look at ways how to relax some of the outdated tax laws, even though the benefit to the individual taxpayer might be indirect and somewhat obscure.

"Give a man a fish and you feed him for a day, teach him to fish and you feed him for life," goes the saying. How many people are paying taxes and how many are receiving social benefits for their efforts or lack thereof? Big businesses play a vital role in all developing and developed nations, while small businesses, irrespective of a country's stage of development, are equally important.

A damn good government will go out of its way to provide advice and anything else it can to facilitate the setting up of schemes that would allow companies that are investing heavily in sports (MTC is a case in point) to be exempted from certain taxes or to find some form of relief for their laudable efforts in sports.

In this way, many corporate businesses will be encouraged to join the fray and pump loads of moolah into the seemingly permanently challenged coffers of many ailing sporting disciplines in this country. Not only will such form of an intervention improve the overall standard of our athletes, but also the volume of international participation, not to mention the potential for job creation and poverty alleviation - all through sport.

There is no doubt that the game of football is a religion in Namibia and government will be well advised to start showing keen interest in the beautiful game. As it stands, African Stars is the only team enjoying the comfort of a decent sponsor in the shape of the Sidney Martin Family Trust operating from Diaz Fishing offices, while other teams in the topflight league are walking a tightrope.

The Sidney Martin Family Trust is investing directly in the team by way of a joint venture with headline sponsor MTC, which funds the country's topflight football league and many other sporting disciplines in order to keep the local sports industry alive. In Namibia, there are many foreign companies, especially from South Africa that invest substantial amounts of money in football in the land of their origin, namely Nedbank, ABSA and the Telkom Cup, car dealerships, etc.

The list of beneficiaries is considerable in the countries where they hail from and although they make substantial profits in Namibia, they are ghosts and indeed very conspicuous by their absence when it comes to any social responsibility initiatives or sponsorships of anything for that matter.

It's much easier to look after the health of a nation through sports. Namibia has about 2 million inhabitants of whom about 10% - 15% are involved in various sports codes of which football is the largest, so one would expect to see more investment in this sector.

This problem can easily be solved if there is a collective effort by all stakeholders, and yours truly simply fails to understand the logic and justice of MTC being the sole sponsor of the majority of sports codes, as if it is the only profitable company in Namibia.

Should some of these stingy blokes' business feasibility studies indicate that it is not profitable to invest in Namibia, how do they explain and justify their continued presence here? I'm just asking.

My personal call on some of these companies, at least those who throw in their two pence, is not to perpetuate apartheid through selective sponsorships by being partial to certain sports codes, which have limited public appeal.

They should be guided by the principle of maximizing inclusivity in order to promote reconciliation and to produce a unified nation through sports.

Yours truly is afraid that until such time that proper measures are put in place to encourage the corporate world to throw their weight behind sports, football in particular, we will continue to remain in the rut that we are in even as I pen these words. I rest my case.

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