Brazilians pay price of tax breaks for World Cup sponsors, warn campaigners

Brazilians pay price of tax breaks for World Cup sponsors, warn campaigners

By agency reporter
2 Jun 2014

FIFA must end its "obscene" insistence on World Cup host countries giving tax breaks worth hundreds of millions to the event’s corporate sponsors, a new campaign is urging.

Brazil will lose up to £312 million in foregone revenue to World Cup sponsors including McDonalds, Budweiser and Johnson & Johnson, according to the campaign by InspirAction, Christian Aid’s Spanish organisation.

"The price of these tax breaks for corporate giants will be paid by people living in poverty in Brazil and that is obscene", said Isabel Ortigosa of InspirAction.

"Brazil is already one of the most unequal countries in the world. The millions that FIFA demands for its sponsors should be used for the benefit of Brazil’s many poor communities, not to enrich the already powerful."

InspirAction has launched a petition calling on FIFA President Sepp Blatter to "give tax breaks for the World Cup sponsors the red card - and never impose these rules on World Cup host countries in the future."

Ms Ortigosa added: "The most conservative estimates suggest that Brazil’s Internal Revenue Service will lose about £145 million to tax breaks for World Cup sponsors, although some estimates suggest the loss could reach £312 million.

"This is money that should be used to help Brazil’s millions of poor families, for instance with better schools, hospitals and public transport, financial support for all communities affected by infrastructure projects and also through a fairer tax system."

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 three per cent, according to World Bank figures.

Land ownership is also sharply unequal, with almost one third of all farmland held by fewer than one per cent of rural landowners, according to research published by Christian Aid.

Parts of Brazil’s tax system exacerbate inequality, by imposing sometimes impossible burdens on poor people.

While FIFA sponsors do not pay tax, 10 Afro Brazilian quilombola communities - formed by runaway slaves – in the Amazonian state of Pará face a land tax bill of £4 million, which they have no hope of paying.

Lawyer Carolina Bellinger of the Pro Indio Commission, a Christian Aid partner organisation which is helping the communities fight the unjust demand, says the case means "huge insecurity for 1,000 families in this region and could affect more than 8,500 others in northern Pará."

Mara Luz, Deputy Head of Christian Aid in Latin America and the Caribbean, said: "Fans travelling to support their country in the World Cup will not get a chance to see the real Brazil and how quilombola families are suffering because of this unfair tax system. Instead, it will be a bland corporate version of the country."

*InspirAction petition here: http://www.lasjugadasdelafifa.inspiraction.org/en#firma-ahora

[Ekk/4]

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