Win Olympic gold, pay a tax
Saturday, August 11 2012
TRINIDAD and Tobago’s Olympians are still liable in law to pay taxes on any medals they win or any lump sum paid to them as reward for good performance by the State, high-ranking tax lawyers at the Ministry of Finance confirmed on Thursday.
The officials noted that medals and any payments made to athletes in reward for performance at the 2012 Games in London, England are liable to be classed as “gains” or “profits” under the terms of the Income Tax Act.
Sportswomen and men are classed as “professionals” under existing policies at the Inland Revenue Division and, thus, fall under the tax scheme.
Section 5 of the Act stipulates that taxes are liable for “gains or profits from the practice of any profession or vocation or management charges for the provision of personal services and technical and managerial skills”. The 4,700 medals being handed out at this year’s Olympics are larger than any other medals handed out at previous Games. They are double the size of the medals handed out in 2008 at Beijing, China weighing 374-400 grammes and measuring 85 mm across and seven mm thick. According to UK press reports, the medals were made from eight tonnes of gold, silver and copper from mines in America and Mongolia. They were manufactured by the Royal Mint at its headquarters in Llantrisant, south Wales. The front of each medal – designed by British artist David Watkins – depicts the Greek goddess of victory, Nike, stepping out of the Panathinaiko Stadium to arrive in the host city. The back of each medal shows the River Thames and the London 2012 logo, with decorative shards meant to convey a crystal-like impression.
A gold medal is actually 92.5 percent silver and 6.16 percent copper, plated in gold. The metal in the medallion is estimated to be worth about $4,000. But even though not100 percent gold, a medal can still fetch hundreds of thousands of pounds at auction. A silver medal has more copper and no gold in it and is worth about $2,000.
However, TT sprinter Lalonde Gordon’s bronze medal, comprising 97 percent bronze, 2.5 per cent zinc and 0.5 percent tin is estimated to be worth only $30 and is unlikely to be the focus of tax authorities.
While in law medals and prize income are subject to tax, in practice, it is unlikely that any action would be taken against an Olympian who does voluntarily pay taxes because of an “informal waiver” which, according to public servants, most Olympic athletes would be given because enforcement of tax measures would be regarded as unpopular.
“Depending on the quantum the sums involved may be relatively minuscule. We have enough problems collecting other taxes,” said an official at the Ministry of Finance. “It would not reflect us in a good light.”
At Thursday’s post-Cabinet press briefing, Communications Minister Jamal Mohammed said the Government is yet to determine exactly how the Olympic team will be honoured.