Promoters Will be Required to Withhold 6% or 15% on Payments Made to Artists in New Tax Measures Promoters will take on a central role in tax enforcement starting 2026/27, as government moves to tighten compliance in Uganda’s largely informal entertainment sector. By shifting withholding responsibilities to promoters, authorities aim to curb revenue leakages and ensure artists’ earnings are consistently captured within the formal tax system.

Starting the next financial year (2026/27), promoters will be required to withhold a 6% tax on any payments made to local artists and public entertainers.

Under the new tax measure, they will also be required to withhold 15% on payments made to international artists in a broader tax enforcement and compliance measure that seeks to boost revenue and improve compliance in the sector.

The proposal introduces a shift in enforcement by placing the responsibility of withholding tax directly on promoters, who have not traditionally been classified as designated withholding agents.

Currently, withholding tax is mainly applied through formal entities such as professionals, insurance agents, advertising agencies, and mobile money operators.

This move comes against the backdrop of longstanding challenges faced by Uganda Revenue Authority (URA), which has previously acknowledged difficulties in collecting taxes from artists due to the largely informal nature of their business.

Many performers receive payments directly from promoters in cash or loosely documented arrangements, making it hard to track earnings and enforce compliance.

While the 6% withholding tax on resident entertainers and 15% on international entertainers already exists, its effectiveness has been limited by these structural gaps.

As a result, a significant portion of income within the entertainment industry has either gone untaxed or underreported.

By requiring promoters to deduct the tax at source before making payments, government aims to close this gap, ensuring more consistent tax collection and bringing a wider segment of the entertainment industry into the formal tax system.

The move also builds on earlier URA efforts to formalize the sector. In January 2023, the authority directed all players in public entertainment, including artists, promoters, event managers, and venue owners, to register for Tax Identification Numbers (TINs), enabling better enforcement of withholding tax and Value Added Tax (VAT).

Under the current tax regime, resident entertainers are subject to a 6% withholding tax, while non-resident entertainers pay 15%.

Public entertainment events also attract an 18% VAT, with operators earning at least UGX150 million annually required to register.

The new measure does not introduce a new tax rate; instead, it expands responsibility for withholding it, targeting promoters as key points of payment in the entertainment value chain.

The proposal is part of the Income Tax measures under the Revenue Enhancement and Compliance Measures for the 2026/27 Financial Year, and is expected to generate about UGX4.2 billion in additional revenue.