In everything we do in life, funding is one of the key aspects to realise our wish list. It is no different in sports.
Our sports industry is in need of a shot in the arm after being one of the first to close, and open again, due to the various Movement Control Orders following Covid-19.
Budget allocations should focus on growing two main areas – the community or grassroots, and unlocking the source of funds from companies into elite sports.
The following proposed mechanisms are meant to assist sports, from the grassroots to the elite level of development, as well as encourage more private investment and sponsorships.
Double deduction of tax on sponsorship for elite sports
Funding from the corporate sector has been few and far between. The one that catches our imagination, and so should our other local companies, is the Petronas partnership with the Badminton Association of Malaysia (BAM).
We can see what leveraging a sport can do for a brand in terms of engaging with its target market. With this as a successful model, corporate Malaysia will need another nudge in the form of enticement – a double deduction tax incentive.
Not meant to last forever, this double deduction can be for a limited period of 10 years, covering certain programmes in sports or leagues organised in Malaysia. This will encourage companies to sponsor elite-level leagues, like the Malaysian Football League (MFL), Sepak Takraw League (STL), Netball Super League (NSL), and even our podium programmes for the Olympics, and others.
Gift Aid, for grassroots
Gift Aid is a form of tax relief incentive for individuals or companies in giving donations to athletes, competitions, teams, or sports programmes up to a maximum amount, annually. This is meant to spur private funding into sports at the grassroots level.
The funds can be from both corporate entities, small, medium enterprises (SMEs), to large companies, or individuals. This is to encourage more sponsorship, secured at a localised level, amongst the community.
Sports Match
Sports Match is a similar incentive mechanism to Gift Aid, meant to spur private funding into grassroots sports.
A limited fund is set up by the government, where community or grassroots level teams, athletes, or sport competition organisers can apply for it on a one-to-one basis. For every RM1 private individual or company funding raised, the government will match it. Every donation will be capped and supervised for accountability and control.
The main difference with Gift Aid is to attract a higher and more consistent source of funding and funder, under this mechanism. Gift Aid will normally attract one-off funders, and not serial funders.
Sports volunteer tax relief
Tax relief should be made available to volunteers who provide their services in sports. Accountants, lawyers, coaches, doctors, and other professionals must be allowed to offer pro-bono work in sports in return for a capped tax relief annually.
This will assist clubs and academies at the grassroots level to attract better expertise and make available a larger pool of support and service volunteers amongst professionals.
Tax hypothecation
Tax hypothecation should be implemented and continued annually to help fund the Youth and Sports Ministry’s community sports like grassroots leagues and “sport for all” programmes.
A small percentage of tax revenue of five per cent from smoking, alcohol and sugar should be ring-fenced and hypothecated to fund an active lifestyle programme amongst Malaysians.
If there is a wish to be made, it is for one or more of the above mechanisms to be adopted to help spur the growth of sports and the industry at a faster rate.
This is the personal opinion of the writer and does not necessarily represent the views of Twentytwo13.
