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The tax authority has been at the center of criticism. This came following a plea from comedian Patrick Salvador to have the taxation body revise its taxation rates on artists.
The comedian claimed that URA exorbitantly charges entertainers, referring to fellow comedian Alex Muhangi, who halted his weekly comedy-store shows due to alleged taxation.
The revenue body has now come out to clarify the method used to tax artists. According to URA Spokesperson Ibrahim Bbossa, artists are required to pay income tax. This is on all earnings, and 6% of their hiring fee is withheld for taxes.
“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 1 million shillings,” he said in a post on X.
Bbossa added that 18% VAT (Value Added Tax) is added to all sales. This includes event tickets, special access, sponsorships, and all other services offered at the event.
“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,” he added.
URA also says that artists earning over 235,000 UGX monthly from employers like record labels are subject to Pay As You Earn (PAYE) tax deductions.
Freelancers on the other hand must account for a 6% tax withheld by payers for performances or services.
Artists are also required to file an income tax return based on profits made. If they delay, one may be fined and/or more interests may be charged.
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