The Revenue Laws Amendment Bill introduced to the National Assembly on Thursday provides for complete tax relief on imports by Fifa-related organisations in the run-up to the 2010 Soccer World Cup.
Introducing the measure, Finance Minister Trevor Manuel said these organisations could import inventory for sale at designated sites — such as stadiums — capital goods, consumables and promotional materials “directly related to the World Cup … all of which will be free from import taxes”.
“These temporary amendments to tax legislation should assist Fifa [world soccer governing body] and their partners to host a successful Soccer World Cup,” he said in a prepared speech, noting that his government had already earmarked R7,8-billion for the construction and upgrade of 10 stadiums for the World Cup and a further R6,7-billion for the upgrade of surrounding infrastructure.
He said three sets of relief were provided.
Fifa, Fifa subsidiaries and participating national associations — other than the South African Football Association — would receive exemption from income tax. “These entities will also generally be entitled to VAT refund credits,” he said.
Secondly, various Fifa sponsors would receive partial exemption. “These sponsors will receive the same tax benefits as the first group but only to the extent that these sponsors operate within what is known as a tax-free bubble”.
He explained that this tax-free bubble covered areas such as the stadiums and the other key locations for hosting the World Cup.
Thirdly, he explained, Fifa-related foreign individuals would also receive partial exemption.
“This partial exemption will eliminate South African income tax associated with the event. This partial exemption will cover a host of foreign individuals associated with the event, such as the Fifa delegation as well as commercial and merchandising staff.”
One item that he said was worthy of mention was the value-added tax on ticket sales.
“Tickets and hospitality services, including hotel accommodation, will remain subject to VAT at the standard rate [14%]. However, some of the VAT revenue collected from the sale of tickets will be made available via the budget of the Department of Sports to subsidise ticket prices for some local supporters.” — I-Net Bridge