26 January 2013

Tanzania: Relief for Clubs As Govt Cuts Revenue Deductions

MAINLAND Premier League clubs will breathe a sigh of relief after the government agreed to review deductions from gate collection revenue, which will now see teams earning decent amount from their matches than before.

The Deputy Minister for Information, Youth, Culture and Sports, Amos Makalla told journalists the government which solely owns the venue will effective today deduct 15 per cent of the collections after Value Added Tax (VAT).

Makalla said after a number of meetings between the government, Mainland Premier League Committee officials, the National Sports Council (NSC) and the Tanzania Football Federation (TFF) they agreed the government should take only 15 per cent of the revenue and get away with the other fixed cost being deducted before.

Makalla said, the 15 per cent collection from each match that will be played at the venue will also cater for all previous deductions that have now been erased, including deduction for the National Stadium Management, Beijing Construction 2m/-, security, cleanness and electricity.

"Such deductions have always been deemed 'burdensome' to clubs, this is why we felt it was wise to review the structure," said Makalla. The Memorandum of Understanding (MoU) to that effect was signed yesterday between the government, TFF and Premier League Committee official.

The latest decision comes in a wake of a series of complaints over what is claimed to be 'unfair' deduction of gate revenue to clubs, especially those featuring in the Mainland Premier League. The clubs and other stakeholders have been complaining that much of the cash collected from gate entrances at the stadium is miss-handled and unfairly distributed to them.

Before the agreement, the government used to earn only 10 per cent of the gate revenue per match, which came down from earlier figure of 20 per cent. However, Makalla said, the agreement does not take care of other non-league and official international matches.

He said organizers of events such as festivals; bonanza or other games to be hosted at the venue will have to part with 20m/- upfront fee. In another development, the government has resolved the row between the TFF and the Tanzania Revenue Authority (TRA) in which the latter seized sponsorship money. He said the saga has been resolved and the money will be paid back to the TFF soon.

TRA froze the TFF sponsored accounts in November, last year, for the latter's failure to pay the tax deductions from salaries of national soccer team, Taifa Stars, foreign coaches. The tax men's move aimed at putting pressure on the federation to pay the tax deductions from the salaries of the Taifa Stars coaches, from the time the team was under the tutelage of Brazilian Marcio Maximo, who arrived in 2006. The deductions that TFF owes TRA amount to 157,407.968.00/-.

The TFF had been informing TRA that the payment of the coaches' tax deductions was hardly to be performed by the federation; TRA stood its ground because TFF was the coaches' patron. The TRA, thus, decided to freeze the accounts including the Vodacom Mainland Premier League's sponsored account which has over 300m/-.

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