Could new tax law help plug player drain?

In the latest issue of SA Rugby magazine, we take a closer look at the in-depth players’ survey that provided insight into some of the challenges being addressed in the local game.

In the wide-ranging MyPlayers report released earlier this year, the results were revealed after more than 100 men and women were surveyed anonymously, while personal interviews were done to determine how the players felt about SA rugby’s ecosystem when it came to finances, socio-political status, mental health, transformation and more.

Money was, for more than half of those who chose flight, the main reason for wanting to leave. South Africa’s political landscape ranked second (18%), followed by the desire to experience different cultures (10%).

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According to the ‘Players’ Voice Survey’, 90% of South African rugby players were in the midst of pursuing overseas deals, or were at least considering the possibility.

Money was, for more than half of those who chose flight, the main reason for wanting to leave. South Africa’s political landscape ranked second (18%), followed by the desire to experience different cultures (10%).

However, as MyPlayers CEO Eugene Henning tells S’bu Mjikeliso in the latest SA Rugby magazine, he believes there are positives to be drawn from this, in that it would have been more troubling if there were systematic issues driving players overseas.

‘If someone wants to maximise the revenue they can get from their playing days, that’s the way it is,’ he says. ‘In a way I think it’s a positive because I would have been much more worried if reason No 1 for leaving was because rugby is in shambles and they don’t like the competitions or that the administrators don’t know what they’re doing,

‘Going for money is almost the same reason you and I would go. It’s human. You don’t want nine out of 10 guys to leave but that’s life; people will try to maximise their revenue earnings. It’s not ideal but it could have been much worse if it was something else.’

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The exchange rate, something SA Rugby or its unions can do nothing about, also favours those who earn foreign currency, but interestingly, a new tax law, which came into effect from the beginning of March could force players to rethink before they book their tickets to popular destinations in France, Japan or the UK.

In the past, South Africans working abroad were exempt from paying taxes on foreign earnings, provided they were physically outside the country for 183 days or more during a 12-month cycle. Now, though, only the first R1-million will be exempt from tax, with everything else subject to a South African tax, over and above the tax liability in that particular country.

Coupled with the sky high cost of living in cities such as London (132% higher cost of living), Paris (96.5%) and Tokyo (110.6%), it could force a rethink before players ink overseas deals.

‘The agents don’t tell the players about these things,’ a top rugby administrator, who asked to remain anonymous, told SA Rugby magazine.

‘They just want to sell them abroad, only for them to find that half their money has gone to tax. Now it’s going to be taxed there and taxed here.

‘Some guys earn R16-million to R20-million, what’s gonna happen then? Only the first million is tax free.’

*The full feature unpacking the MyPlayer report is available in our April of SA Rugby magazine, which is now on sale. During this period of lockdown, we hope you are able to get your hands on the latest copy, but we will continue to bring you the best possible content. You can also subscribe here

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