Latvian basketball player Armands Škele, star of Estonia's champion club BC Kalev/Cramo, has been receiving perks but no registered pay from his employer for the past year and a half, a situation that has prompted criticism from the Tax Board.
The practice of paying sportsmen nontaxable scholarships instead of salaries is not uncommon in Estonia, and is not illegal, but ETV's “Pealtnägija” program found that the Latvian player has not even received a scholarship - a point that the club has not denied.
Škele signed with Kalev/Cramo in 2010, departing Latvia at a time he was 90,000 euros in debt. Creditors caught up with him in Estonia in 2011, after which the player has not received any on-the-books pay from the club.
Kalev/Cramo's president, Ivar Valdmaa, said that Škele in essence receives the free use of a car, an apartment, food and a small monthly allowance in exchange for his services to the club. Add-ons such as cars and apartments are normally subject to social tax in Estonia.
Valdmaa said that Škele also has an outstanding debt to the club, which he incurred when the club helped with him with previous loans. He added that without that debt and Škele's situation, Kalev/Cramo would not be able to keep hold of such a high-profile player.
Taxmen taking on sportsmen?
Evelyn Liivamägi, head of the Tax Department at the Tax Board, said that sports clubs are abusing the scholarship system, as a scholarship is only broadly defined by legislation.
She said scholarships should not be paid to people for a day-to-day job and called on the involved parties to change the system.
One creditor has asserted that the club pays Škele 7,000 to 10,000 euros a month in cash, off the books. The sum is about half of what a club would pay if a standard work contract were signed.