2026 World Cup: U.S. Tax Burden Threatens African Teams' Finances
As excitement mounts for the expanded 48-team 2026 FIFA World Cup, set to be hosted across the United States, Canada, and Mexico, a critical financial issue is emerging that disproportionately affects participating nations from Africa and other developing regions. Unlike previous tournaments, many of these countries are preparing for significant economic challenges due to tax obligations in the United States, raising alarms that competing in football's premier event could impose a heavy financial toll.
Lack of Tax Exemptions Creates Imbalance
According to an investigation by the UK publication The Guardian, the core of the problem lies in FIFA's failure to secure a comprehensive tax exemption agreement with the U.S. government for all competing nations. While FIFA itself enjoys tax-free status in the United States, a privilege established since the 1994 World Cup, this exemption does not apply to the 48 national associations participating in the 2026 tournament. This situation has resulted in a pronounced disparity, with only 18 qualified countries benefiting from double taxation agreements (DTAs) with the United States, which protect them from federal taxes.
Most of these protected nations are European, along with a few others such as Egypt, Morocco, South Africa, Australia, Canada, and Mexico. For African teams without such agreements, including several debutants and smaller footballing nations, the financial consequences could be severe. Countries like Haiti and Cape Verde, for example, may face higher tax liabilities than traditional football powers like England or France, whose federations are safeguarded by DTAs. This effectively establishes a two-tier system where wealthier and more diplomatically connected nations experience lower operational costs, while less-developed football associations bear heavier financial burdens.
Impact on Grassroots Football Development
Tax experts caution that the repercussions could extend well beyond the tournament itself. Oriana Morrison, a consultant who has advised several football federations, highlighted that funds lost to taxation could otherwise be reinvested in grassroots football development. For many African federations, World Cup participation is not merely about prestige but also about economic opportunity. Prize money and associated revenues often support infrastructure projects, youth programs, and domestic leagues.
However, with U.S. federal corporate tax set at 21 percent and top income tax rates reaching 37 percent, a substantial portion of these earnings may be absorbed before reaching home federations. Even for countries with DTAs, relief is only partial. Under U.S. law, athletes and coaches must still pay taxes on income earned while performing in the country. This means high-profile figures such as Carlo Ancelotti, currently managing Brazil, could face dual taxation—both in Brazil and the United States. In contrast, managers like Thomas Tuchel of England benefit from more favorable arrangements, paying taxes only in their home country due to existing agreements.
Financial Strain on Smaller Associations
While wealthier federations may absorb these additional costs, smaller associations—many from Africa—are unlikely to have such financial flexibility. Compounding the issue is FIFA's fixed operational budget of $1.5 million per team, despite rising travel and accommodation costs in the United States. Additionally, the daily allowance for delegation members has been reduced from $850 at the 2022 Qatar World Cup to $600 for the 2026 event, further straining budgets.
This financial pressure threatens to undermine the developmental benefits that World Cup participation typically brings to emerging football nations. Without adequate financial safeguards, the dream of competing on the global stage could become a costly endeavor, potentially hindering long-term growth and investment in the sport across Africa and other developing regions.
