The Taxation of athlete’s income in Kenya: an analysis of the duty to pay tax and its link with optimal tax revenue collection
Nakholi, John B. Inyanga
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The overarching objective of this paper was to establish whether there existed the issue of double taxation practices against Kenyan athletes with the aim of answering the question, does the abolition of such practices lead to positive results in terms of tax collection? The scope of the paper was Kenyan athletes that ply their trade professionally both locally and abroad. These individuals were chosen because they generate income through their activities; income that is then subject to tax under Kenyan Laws. The paper sought to investigate whether the fact that they would, in many instances, be liable to tax on that income both where it is generated and in Kenya they were effectively being taxed on the same income twice. The paper met its goals mainly through utilization of both primary and secondary data as was available to the researcher with a focus on up to date information, including that from statute, case law and government bodies. The major conclusions of the paper were that by nature, the income of athletes was a complicated creature because of its varied streams or type and the plurality of its sources. This tended to complicate the definition of what income would be considered taxable. Further, it was found that the athletes had a duty much like all other Kenyans to pay tax on income generated. The athletes however were entitled from protection from the government from situations where they would be unfairly taxed. It was also discovered that government has several tools to ensure this is the case, including the negotiation of double taxation agreements with other states or setting up mandated bodies to assist athlete’s on tax matters. Thus while it is true double taxation constitutes an injustice and could mean athletes subjected to it become reluctant to pay tax, as long as they were protected from it they had a duty to pay their tax. By way of recommendations, this paper would urge all the parties involved to act. On the part of the athletes, there must be sensitization on the duties and obligation to pay tax and also on the protections they are entitled to. On the part of the government, there must be invigorated effort to ensure Kenyan citizens are protected in terms of their tax rights. This is the only way to create a conducive environment for tax collection that will then mean government generates revenue at an optimal rate.