Ibrahim Bbossa
It is important for anyone in Uganda’s entertainment industry to understand their tax obligations. This includes artists, musicians, and writers who are required to pay taxes on their earnings from any creative work they produce.
Artists in Uganda are required to pay income tax on all earnings, including international show revenues. Taxable income is your earnings minus allowable deductions. An 18% VAT applies to all services and goods, including entertainment. Artists with annual sales over Shs 150 million must register for VAT and charge it on their services.
Freelancers will need to pay a withholding tax of either 6% or 15%, depending on whether they are local or international artists. This also includes adding 18% VAT to ticket sales and services offered at events, which is a crucial element in pricing strategies.
Employers will manage taxes for their employees, while freelancers are responsible for their own tax contributions. Artists earning over UGX 235,000 monthly from employers like record labels are subject to Pay As You Earn (PAYE) tax deductions. Freelancers must account for a 6% tax withheld by payers for performances or services.
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For instance, when hiring local artists, 6% of their fee is withheld for taxes. For international artists, this rate is 15%, and it must be remitted to URA.
before their departure.
In addition, a 6% tax is applicable for expenses like chair rentals exceeding Shs 1 million. An 18% VAT is added to all sales, including event tickets, special access, and sponsorships.
After accounting for these taxes, filing an income tax return is necessary. This tax is based on profit and varies by industry role. It is important to file your taxes on time to avoid significant fines and accumulating interest. Taxes paid abroad can offset Uganda’s taxes, and costs related to foreign income are deductible.
The author is acting commissioner Public and Corporate Affairs at URA.