Myan­mar’s for­eign foot­ball play­ers score goals, un­of­fi­cial tax breaks

The Myanmar Times - - Sport - NYAN LYNN AUNG nyan­lin­aung@mm­ KYAW ZIN HLAING kyawz­inhlaing@mm­

THE face of Myan­mar foot­ball has changed dras­ti­cally since 2009, when the mod­ern Myan­mar Na­tional League was es­tab­lished and hir­ing play­ers from other coun­tries be­came com­mon prac­tice. To­day more than 50 for­eign-born foot­ballers don jer­seys for the 22 clubs that com­prise MNL and its lower di­vi­sion, MNL-2, and their con­tri­bu­tions have changed the na­ture and raised the level of com­pe­ti­tion of Myan­mar’s home­grown foot­ball league.

But their con­tri­bu­tions aren’t just on the field. For­eign foot­ball play­ers are re­quired by law to pay in­come taxes – just like any for­eigner who re­sides in Myan­mar as an em­ployee for more than 183 days. But a Myan­mar Times in­ves­ti­ga­tion has found reg­u­la­tory con­fu­sion and a lack of transparency leads many clubs to pay the tax for their for­eign play­ers. Others may not be pay­ing at all.

Mak­ing more than any­one else Myan­mar’s In­come Taxes Law, adopted in 1974 and amended in March 2015, states that earn­ers mak­ing more than K20 mil­lion (US$17,000) per year are re­quired to pay 20 per­cent of their an­nual in­come to the Union gov­ern­ment. For those mak­ing K30 mil­lion (US$25,000) or more per year, the rate is in­creased to 25pc.

The Myan­mar Foot­ball Fed­er­a­tion re­ports the salary of Myan­mar-born play­ers at K450,000 to K1 mil­lion (US$375-$840) per month, but said in­for­ma­tion on for­eign­ers’ con­tracts is con­fi­den­tial. The clubs them­selves also de­clined to pub­licly re­lease the fig­ures, cit­ing fears of caus­ing fric­tion be­tween play­ers – pre­sum­ably when lo­cal play­ers dis­cover their for­eign team­mates were so much more am­ply com­pen­sated.

Some for­eign play­ers wish­ing to re­main anony­mous, how­ever, opened up about their salaries. They re­vealed that most col­lect be­tween US$2500 and $4500 per month – more than five times that of their lo­cal team­mates, and enough to lodge them in the high­est-earn­ing in­come tax bracket. Ac­cord­ing to them, the clubs re­mit­ted taxes on their be­half, be­fore giv­ing them their pay­cheques.

But did the clubs pay enough? By law, Myan­mar’s for­eign foot­ballers should be hand­ing over one-quar­ter of their pay­cheques, but U Kyaw Ko Sint, me­dia of­fi­cer for Hpa-an-based Zwekapin FC, said the three for­eign­ers on his team have never been re­quired to re­port earn­ings to the MFF or the In­ter­nal Rev­enue De­part­ment.

He added that the gov­ern­ment has not ex­am­ined any of the for­eign­ers’ con­tracts, nor con­tacted play­ers to re­quest pay­ments, but claimed that the taxes are not owed. In­stead, he said, the club’s front of­fice han­dles fi­nances for the play­ers.

“We pay the in­come taxes of our play­ers,” U Kyaw Ko Sint said. “We have not evaded pay­ing taxes and did not lie about pay­ing taxes.”

He de­clined, how­ever, to re­veal whether the club is pay­ing the high­est tax rates.

Who is check­ing? Some for­eigner-em­ploy­ing com­pa­nies, such as INGOs, have mem­o­ran­dums of un­der­stand­ing with the Re­lief and Re­set­tle­ment De­part­ment that ex­empt their ex­pa­tri­ate staff from pay­ing in­come tax. Other firms pay their staff in their home coun­tries, mean­ing that those ex­pats pay the cor­re­spond­ing in­come tax back home but are not sub­ject to Myan­mar’s tax.

But for foot­ball, the rules are a lit­tle murkier. In 2009, the MFF an­nounced a tax ex­emp­tion for for­eign­ers dur­ing their first three sea­sons; af­ter the 2012 sea­son ended, the MFF did not is­sue any an­nounce­ments or cir­cu­late in­for­ma­tion to in­struct play­ers about pay­ing their taxes af­ter the ex­emp­tion ex­pired.

U Zaw Min Htike, the MFF’s me­dia of­fi­cer, passed the re­spon­si­bil­ity back to the play­ers and clubs, say­ing the fed­er­a­tion does not mon­i­tor for­eigner foot­baller earn­ings or tax re­turns.

“All MFF mem­bers must pay taxes, but we have not in­spected whether the play­ers are pay­ing their taxes or not,” he said. “We also do not know what tax rate they are sup­posed to be pay­ing.”

Nei­ther, ap­par­ently, do the clubs them­selves. Yangon United me­dia of­fi­cer U Myo Myint Thaung told The Myan­mar Times that the club did not know which tax bracket its for­eign play­ers fit.

“The tax­able per­cent­age that for­eign play­ers have to pay is the same as other work­ers, but it may vary for the play­ers ac­cord­ing to their salaries,” he said.

De­spite pro­fess­ing ig­no­rance of the play­ers’ in­di­vid­ual tax obli­ga­tions, U Myo Myint said that the club pays in­come tax for its for­eign play­ers up­front, cut­ting the mys­tery amount from their pay­cheques in ad­vance. Other clubs re­ported a sim­i­lar ar­range­ment, say­ing that the play­ers’ con­tracts in­clude a clause stip­u­lat­ing that the team will front the player’s in­come tax for the du­ra­tion of the con­tract.

“We do not know what per­cent for­eigner play­ers have to pay, but we pay it,” he said cryp­ti­cally.

Most of the other MNL teams con­tacted for this story said that they pay the for­eign­ers’ taxes, but de­clined to re­veal for which bracket. A mem­ber of the In­ter­nal Rev­enue De­part­ment who wished to re­main anony­mous ad­mit­ted that con­firm­ing the pay­ments is dif­fi­cult, as in­come dec­la­ra­tions are of­ten filed at rel­e­vant town­ship of­fices and it is not al­ways clear where the for­eigner play­ers are reg­is­tered – even when most of the MNL’s teams con­tinue to play their home games in Yangon.

The IRD of­fi­cer con­fessed sus­pi­cions that many for­eign­ers ef­fec­tively evade pay­ing in­come taxes, as com­pa­nies of­ten skip the pay­ments on for­eign­ers’ in­come be­cause the process can be con­vo­luted and there is lit­tle en­force­ment mech­a­nism in place. He ad­vised com­pa­nies to send in­come dec­la­ra­tions di­rectly to the cen­tral rev­enue de­part­ment as well as all nec­es­sary pa­per­work to find out ex­actly how much the play­ers should be pay­ing.

But un­til a proper en­force­ment mech­a­nism is in place to in­cen­tivise proper in­come re­port­ing, many teams can con­tinue send­ing “ad-hoc” pay­ments, or ne­glect­ing them al­to­gether – and the for­eign play­ers of Myan­mar’s foot­ball leagues can keep en­joy­ing life in the Golden Land tax-free.

Photo: Face­book/ Ayeyawady United

Ayeyawady United’s Yakubu Abubakar (24) from Nige­ria and Nishi­hara Takumu (27) from Ja­pan, are just two of more than 50 for­eign-born foot­ballers play­ing in the Myan­mar Na­tional League.

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