Uganda targets entertainers for improved tax

In a communiqué posted on its website, URA directed persons engaged in public entertainment, namely, artists, performers, authors, producers, promoters, event managers, recreational space owners, bar owners and hotel owners, among others, to get Tax Identification Numbers (TINs) to facilitate collection of taxes from their earnings.

“All persons earning income from entertainment are obliged to register for taxes with URA and a TIN acts as an account of a taxpayer,” URA said. “Failure to obtain the same shall attract a fine not exceeding Ush3m (about $800) or imprisonment of six years or both on conviction if the failure is done knowingly or recklessly.”

The taxman added that if the failure is due to ignorance, it will attract a fine of Ush1m or imprisonment or both on conviction.

According to the Uganda Bureau of Statistics, the country’s services sector contributes Ush47.1 trillion to the economy.

In a recent interview with Uganda’s Nile Post, URA assistant commissioner public and corporate affairs Ibrahim Bbosa said the entertainment sector can make a meaningful and significant contribution to the revenue efforts in the country.

“This is one way of widening the tax bracket,” Bbosa said. “It is important to know that tax is paid by people who have an income. This can be a personal or business income."

Bbosa added that many in the entertainment sector are unaware of their tax obligations. "So we are asking those in the entertainment industry to get a tax identification number. This tax identification number is what identifies an individual or a business with the tax body and in case of a refund the URA uses the same tax identification number.”

URA said TINs will also allow event planners to withhold tax on payments and charge value added tax.

Withholding tax applies to payments for both resident and non-resident entertainers generating income within Uganda. Non-resident entertainers are charged withholding tax of 15%, while resident entertainers are charged 6%.

URA said that value added tax on local public entertainment events is rated at 18%, with owners of entertainment events, whose annual turnover is Ush150m and above, expected to register for value added tax. Taxes are filed to URA within 15 days after the end of the month the event was held.

Bbosa added: “Penalties are really there to compel somebody to comply. If you fail to comply and we can prove you were aware because we have notified you then there are penalties for that.”