FIFA won’t pay any tax to the Brazilian government on its sales and merchandise at the 2014 World Cup

In 2002, Japan and South Korea spent 10 billion reals (£2.8bn, $4.4bn) each on hosting the World Cup,  and (after taxes) FIFA made a profit of 3 billion reais.

In 2006, Germany spent 9 billion reais on its World Cup, and (after taxes) FIFA made a profit of 5 billion reais.

In 2010, South Africa spent 11 billion reais on its World Cup, and (after taxes) FIFA made a profit of 6 billion reais.

In 2014, Brazil has already spent 35 billion reais on hosting the FIFA World Cup. And for the first time ever, FIFA will be exempt from paying all taxes to the Brazilian Treasury.

As a result, FIFA stands to profit 15 billions reais from the 2014 Brazil World Cup.

FIFA told Brazil it would only allow the country to host the World Cup if it made the football organisation exempt from imported goods taxes (IPI), the contribution to Social Security Financing (Cofins) on imported goods and services, and the Contribution to the Programs for Social Integration and Heritage Formation of the Public Servant ( PIS-Pasep) on imports.

The savings from FIFA not paying tax amount to around 2.5 billion reais. That’s money that would have gone into the government coffers that will now remain in Switzerland, where FIFA has charitable status and pays almost no taxes anyway.

“Brazil stands to win a lot more by the stimulating effect on the economy,” said the Brazilian sports minister Orlando Silva back in 2010. Brazil’s economy has slowed to 0.2 per cent in the run up to the World Cup, an indication that huge sporting events don’t bring quite the stimulus politicians were expecting, although it has made a few people very rich.

If nothing else, Brazilians should be angry that FIFA is paying no tax for the sales it makes on its merchandise. It’s giving nothing back to the country financially. It’s also using an army of unpaid volunteers to make sure the World Cup goes well. Protests against the government are already shutting down entire highways in Belo Horizonte – it will be interesting to see how many protests flare up in the next few weeks.

 

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