Our View: Why are football clubs above the law?

Cyprus will be setting a world first if the government’s bill aimed at rewarding football clubs for systematically breaking the law is approved by the legislature. Some deputies expressed reservations when the finance ministry’s bill was discussed at the House finance committee, but no party has taken a definite stand against this state-inspired insanity. That a government could come up with a law proposal that makes a complete mockery of rule of law is beyond belief.

According to this bill, the state tax on betting will increase and the increased revenue of the National Betting Authority will be allocated via the Cyprus Sports Federation (Koa) to the 19 football clubs that owe a total of €32.2 million to the inland revenue department and the social insurance fund. This extra revenue would go towards paying off the existing tax debts of the law-breaking clubs. Instead of punishing the clubs for systematically refusing to pay their tax dues, the state will be rewarding their financial recklessness and contempt for the law with more taxpayers’ money.

In the past the government had set up repayment schemes for the clubs so they could clear their debts. These schemes allow the debtor to repay what is owed in instalments on the understanding that new tax obligations were settled promptly. If either condition is not met, the scheme is cancelled. Such a scheme was set up in 2021, but the clubs did not meet their obligations. Instead of legal action being taken against them a new repayment scheme was approved by the council of ministers in 2023, giving them a 14-year repayment period. The above-mentioned conditions remained in place.

An audit office investigation found that since the introduction of the scheme in May 2023, out of 19 clubs, five had not paid a single instalment while 14 had accumulated new tax debts. If these clubs were private businesses, they would have filed for bankruptcy and the state would have sold off their assets to recover some of the debts. Directors or owners may have ended up in prison for failure to pay their debts to the state. These laws do not apply to directors of football clubs, who are, in effect, encouraged by the state’s criminal tolerance, to operate dishonestly and irresponsibly.

As if the state’s scandalous disregard for blatant violations of the law was not bad enough, it will now force taxpayers and betting shops to pick up the bill for the criminal behaviour by football clubs. The taxation on betting will go up and the profits of betting shops squeezed so that insolvent football clubs can be kept afloat, and carry on hiring players they cannot afford. The state should be pulling the plug on them instead of subsidising their financial recklessness. And what sort of lesson is this for the small number of clubs that have been paying their tax dues? They should be protesting about this unfair treatment by the state, which is penalising the law-abiding clubs operating within their means.

This scandalous bill must be rejected. Parties should show a sense of responsibility and stop the government’s attempt to reward law breaking and encourage its continuation.