Tax Breaks for FIFA World Cup Sponsors
FIFA requires host countries to grant tax exemptions to it and its sponsors. Campaigners argued Brazil gave up substantial revenue as a result.
Love football? Crazy about the FIFA World Cup? Many fans are unaware that the host country carries the cost of the tax breaks granted to FIFA’s sponsors.
FIFA, football’s governing body, imposes preconditions on host countries to allow tax exemptions for FIFA, its subsidiaries and its sponsors. For the 2014 tournament it required Brazil, as host, to grant substantial tax breaks to the World Cup sponsors.
According to a campaign by InspirAction, Christian Aid’s Spanish organisation, Brazil was expected to forgo up to £312 million in tax revenue as a result of the reliefs granted to FIFA and the World Cup sponsors. Even the most conservative estimates put the loss at around £145 million.
Campaigners argued that the arrangement amounted to FIFA creating its own tax haven — a fully exempt position in which FIFA and its subsidiaries pay no tax of any kind at any level, state or municipal, covering consumption taxes, income taxes and everything else.
The price of these tax breaks for corporate giants will be paid by people living in poverty in Brazil, and that is obscene. Brazil is already one of the most unequal countries in the world. The millions that FIFA demands for its sponsors should be used for the benefit of Brazil’s many poor communities, not to enrich the already powerful.
— InspirAction
World Cup sponsors are large multinational companies whose advertising reaches audiences across the world during the tournament. Campaigners pointed out that they contribute very little in tax to the host country in return, and that the people who lose most are those who can least afford it.
InspirAction launched a petition calling on then FIFA President Sepp Blatter to give tax breaks for World Cup sponsors the red card, and never to impose such rules on host countries again. Their argument was that this money should go towards schools, hospitals and public transport, support for communities affected by infrastructure projects, and a fairer tax system.
Source: Tax Justice Network and InspirAction.