Coca-Cola, McDonald's, Visa and the rest of the corporate sponsors of the August 5–21 Olympic Games in Rio de Janeiro won't be paying any taxes on the money they earn due to a tax exemption law that is set to cost Brazil hundreds of millions of dollars.
The exemption, which lasts until December 31, 2017, excludes from taxes revenue generated by advertising, product sales, imports and any other activity related to the organisation of the games.
“It is yet another manifestation of the privileges that multinationals worldwide have today,” said Antonio Martins, director of the alternative Brazilian news outlet Outras Palavras. “And it's not an isolated event, which is limited to a sports mega event.”
Brazil has 37 million people living in extreme poverty, its economy is currently in recession and the interim government of Senate-imposed President Michel Temer has approved a fiscal austerity program. Meanwhile, the country is expected to lose about US$1 billion dollars in tax revenue thanks to the exemption, according to the BBC.
Naomi Fowler of the Tax Justice Network said the tax exemption on corporations is a precondition forced on any candidate to host a world sport event.
“Every country must accept that they will become a tax haven for these companies during a period of time,” Fowler told the BBC.
Among the main sponsor companies of Rio 2016 are Coca-Cola, McDonald's, Visa, Bridgestone, Samsung, Panasonic, Omega, Procter & Gamble, General Electric, Nissan, Globo, Nike, Microsoft and Airbnb.
According to organisers, the Games are a chance for the host country to bring in tourists, invest in infrastructure and promote a healthy lifestyle among its citizens. But most countries are left in debt after the Games, with governments often responding with severe austerity measures.
[Reprinted from TeleSUR English.]