BCCI biggies off to SA to test tax waters

Will the Indian Premier League attract the South African tax laws? The Board of Control for Cricket in India is not yet sure but it is taking steps to ensure  the multi-million dollar operation does not face hurdles.

A high power delegation, led by secretary N Srinivasan, is rushing to South Africa. The delegation includes treasurer MP Pandove, chief administrative officer Ratnakar Shetty  and the Board’s tax experts. They leave on Saturday night.

The stated reason for the visit is to sign a formal pact with the Cricket South Africa. Lalit Modi, who led the discussion with CSA over the conduct of the IPL, cannot sign the agreement. It has to be done by the secretary. But board sources say that the visit has larger significance. It wants to explore ways on how to fund and manage an operation of a very high magnitude.

One of the important aspects of the visit is to seek legal and tax experts’ advice on whether or not the IPL/BCCI should open an account in South Africa. The variable taxation rate in South Africa is learnt to be slightly higher than in India — it is up to 40 per cent as against the maximum of 35 in India.

India and South Africa, one may note, have a double taxation pact which grants exemption in one country if the tax is paid in the other. “We’re not sure if we’re opening an account during this visit,” Pandove said. 

According to a South African tax expert, the IPL, the prize money or even the players’ fees should not attract the tax laws. “Because it is funded and managed by an Indian entity. So I would not think there should be any problem in this county for the IPL or players,” Thiru Moodaly, a Durban-based finance expert, told DNA. His advice for the Indian Board is not to open an account in South Africa for the IPL operation.

No BCCI official was willing to come on record but one member of the delegation said it wants to explore ways how the 36-day tournament could be staged without any hitches. When contacted, Modi expressed ignorance. “Frankly I’ve no idea,” the IPL chairman said from Johannesburg.

It may be recalled that the Indian players’ prize money for the CB Series win last year is still struck in Australia. The money is believed to have attracted tax of about 46 per cent. “We’re looking into the matter. We’re hoping to reach a settlement soon,” the Board treasurer said.