Uganda Revenue Authority (URA) has directed all individuals earning from entertainment activities to get a Tax Identification Number (TIN) and failure to comply could result in fines and imprisonment.
Some of these individuals include; artists, performers, authors, producers, promoters, event managers, recreational space owners, bar owners and hotel owners.
The Assistant Commissioner Public and Corporate Affairs at URA, Ibrahim Bbosa told the Nile Post in an interview that 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. It is important to know that tax is paid by people who have an income. This can be a personal or business income,” he said.
Individuals or businesses that have been getting income are obliged by law to file returns with the tax body which include expenses, gross income, profit among others. This helps the tax body to compute the tax that one needs to pay depending on the returns filed.
Bbosa stated that for the entertainment sector; there are many people who have joined the sector and many of these probably may be unaware of the obligation of paying tax on income they generate from the industry.
“So, we are requiring 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, “he stated.
“But the law also requires the one who is paying you to withhold 6% of your payments as a credit on your part. This 6% is withheld as a credit to you in that when you file your returns, it will be reduced by the same amount of the credit, “he added, adding that the withholding tax is on gross amount.
When it comes to income for an individual whatever amount one is getting from gross income which is 6% will be withheld subject for one declaring his or her income.
So, there is withholding on income and on Value Added Tax (VAT). And the withholding on VAT has a threshold which is Shs 37.5 million in a period of three months but personal income is on gross amount which is 6%.
Bbosa urged this category of people to go and get their tax identification number which he said is simple and free. “You can go to URA portal, you can do it on your phone or computer,”
On issues of penalties, Bbosa said that URA is not interested in penalising those who would fail to comply but they are more interested in voluntary compliance.
“Penalties are really there to compel somebody to comply. Yes, if you failed to comply and we can approve you were aware probably we have notified you, we have written to you. So, you cannot claim ignorance about this and there are penalties for that, “he said.
Without mentioning the kind of penalties that would be given to those who failed to comply, Bbosa said the tax body is interested in educating the public to know their obligations, adding that the consequences are not the most important thing at the moment.
