THE BLOG

FIFA Is a Global Tax Bully

16/06/2014 11:30 BST | Updated 13/08/2014 10:59 BST

World football organiser FIFA has in recent days been compared with the Mafia, accused of rampant corruption and described as 'beyond the pale'.

But, before football hysteria takes over, let's remember another important charge: that FIFA is a global tax bully which takes money due to ordinary people and hands it to the rich, on a staggering scale.

I'm thinking of the way the organisation forces would-be World Cup hosts to agree to gigantic tax breaks to the multinational companies which sponsor or otherwise support the football contest.

This year, the companies benefiting from this extraordinary give-away include McDonalds, Budweiser and Johnson & Johnson.

The multinationals are effectively taking this money from ordinary Brazilians, millions of whom live in poverty and who depend on the public schools, hospitals and transport that are funded by tax.

Most Brazilians will never even dream of the sums their government is handing over to McDonalds & co. More than two-thirds of workers earn less than twice the minimum wage, while 14 million families have an income of less than £20 a month.

Yet as result of FIFA's tax bullying, Brazilians will forego between £145 and £312 million in tax revenue, according to Christian Aid's Spanish organisation InspirAction. It is campaigning for FIFA to end its obscene tax demands and has launched a petition accordingly.

If it seems hard to believe that any country would agree to transfer so much money from its own citizens to multinationals, then have a look at the website of accountants PricewaterhouseCoopers. It details the tax give-aways which FIFA has imposed on Brazil, which appear to cover taxes otherwise due over a period of five years.

The taxes Brazil has been forced to withdraw include corporate income tax and import taxes on companies involved with the World Cup. Foreigners working on the Cup in Brazil - presumably including highly-paid footballers themselves - are also getting tax breaks.

Then there is the cushy treatment that Switzerland-based FIFA insists on for itself in host countries, like a mobile tax haven that is tax-free wherever in the world it pitches up.

The costs of Brazil's tax give-aways to the rich and powerful are in addition to the other bills the country has run up for the World Cup, which are thought to total more than £6.5 billion. According to Reuters, this makes it the most expensive Cup ever.

No wonder then that Brazilians are asking 'Cup for whom?' Far from the glossy world inhabited by their visitors from McDonalds, Budweiser and Johnson & Johnson, their country is shockingly unequal, as well as corrupt and violent.

When the BBC exposed FIFA's tax bullying in 2010, it asked Brazil's then sports minister to justify the gigantic tax give-away. He claimed that Brazil would gain more than it loses, as a result of the Cup's 'stimulating effect on the economy'.

Even if this is true - and the South African World Cup experience suggests otherwise - the question of who benefits remains critical. In a country in which income and wealth are so unevenly divided, the winners are extremely unlikely to be among the poorest.

Indeed, inequality in Brazil is so severe that the top 20 per cent of people get almost 60 per cent of all income, while the bottom 20 per cent (around 40 million people) get just 3 per cent, according to World Bank figures. If this applies to the benefits of the World Cup, then Brazil's poorest people will not even notice them.

Seen this light, FIFA's demand that Brazil forego huge tax revenues is all the more sickening. Because the public services funded by tax are disproportionately important to people who live in poverty.

This alone should shame the likes of McDonalds, Budweiser and Johnson & Johnson into paying their taxes in Brazil, regardless of the concessions FIFA has won them.

FIFA itself is evidently beyond shame but that does not mean that governments and voters have to accept its bullying ways. I hope that public fury towards FIFA and the Cup in Brazil will make ministers around the world think again about how much it is really worth to have the circus show up in their countendsry.

What needs fixing is not football or the World Cup but the way the event is currently organised and the unfair share of its profits that currently goes to FIFA above all.