URA requests that performers register for TINs

All individuals earning a living from the entertainment industry have been urged to register for Tax Identification Numbers by the Uganda Revenue Authority (URA) (TINs).

The tax authority wants to employ TINs to assist with a withholding tax on payments and value-added tax (VAT) paid by event organizers for public entertainment.

The URA defines entertainment as a type of activity that keeps an audience’s attention and interest or provides pleasure and delight in a notice titled “Taxation of Public Entertainment Events” that was published on December 29, 2022. Events for the general amusement of the public include concerts and performances.

Artists, performers, authors, producers, promoters, event managers, proprietors of recreational spaces, bar owners, and hotel owners are some of the major stakeholders in the sector.

The Uganda Bureau of Statistics (UBOS) estimates that the services sector, which includes entertainment, makes up a combined 47.1 trillion Shillings of Uganda’s GDP. With the help of employee taxes, the entertainment sector has a lot of potential to boost the national economy.

Event organizers must: Register with URA for taxes, Retain tax from payments, charge VAT and send the money to URA, and register with URA for taxes.

“All individuals who make a living in the entertainment industry must register with URA to file taxes. You receive a Tax Identification Number (TIN) for tax reasons after your application is approved, the letter states.

Tax Identification Number is TIN. It is a 10-digit number that serves as a taxpayer’s account with the Uganda Revenue Authority (URA). All taxpayers are required to use this number in all business dealings and correspondence with URA.

“Since a TIN is free to obtain, no one should demand payment for it.”

How to register for taxes/ apply for a TIN?

A TIN can be acquired through any of the processes below:

Through the URA Web portal:
 
Visiting a URA-designated office

·        Visit the URA web portal and  click e-Services
·        Under e-Services; click register for taxes
·        Select the registration type applicable to you
·        Complete the application and submit
·        Upon approval by URA, you will receive a TIN and it will be sent to the phone number and email address you provided to URA at the point of registration.
In case a taxpayer cannot register online, he or she can walk into any of the URA offices or One Stop Centres located in any Municipality or KCCA division and assistance shall be provided to complete the registration process.

In case of failure to do any of the above, call the Contact Centre: 0800217000 or 0800117000 (Toll-free) or WhatsApp 0772140000 or send an email to services@ura.go.ug

Failure to register for a TIN

According to URA, if a person fails to apply for registration, they could be sentenced to a fine of up to Sh3,000,000, up to six years in prison, or both, depending on whether they did it intentionally or recklessly. In all other cases, they could be sentenced to a fine of up to Sh1,000,000, up to two years in prison, or both.

Withholding tax

When someone pays another person, a third party (withholding agent) withholds income tax as a sort of advance on that payment (payee).

A person who is legally required to withhold tax from the payment is known as a withholding agent. Being a designated withholding agent—someone chosen by the minister of finance and listed in the gazette to withhold tax from payments made to others—and making a payment on a transaction where WHT must be withheld by law are requirements for being a withholding agent.

Withholding tax on payments to non–resident public entertainers

Every non-resident public entertainer in Uganda is subject to tax on their income.

15% of the gross amount of the remuneration received by the non-resident public entertainer is taxed.

Every member of the group that is subject to the tax is jointly and severally liable for the tax’s payment.

Regardless of whether they are a designated WHT agent or not, the person making the payment, such as a promoter, agent, event owner, or any similar person, is responsible for withholding the tax under this clause. Before the non-resident entertainer departs the country, the tax is due.

Withholding tax on payments to local public entertainers

Regardless of whether they are a designated WHT agent or not, anyone paying a local public entertainment for services must withhold tax at a rate of 6% on the gross amount.

The individual receiving the payment, such as a promoter, agent, event owner, or another comparable person, is largely responsible for submitting and paying the tax that was withheld.

As a result, if they don’t withhold the tax, it will be collected from them.

A person who is required to withhold tax has 15 days after the end of the month in which the payment subject to withholding tax was made to pay the tax that was withheld.

Charge VAT and remit to URA

VAT is an indirect tax on consumption that is paid by the final consumer.

VAT-registered persons are required to charge VAT whenever they make supplies that attract VAT and file monthly returns within 15 days after the end of the month in which the transaction took place.

 VAT on local public entertainment events

The supply of entertainment services is a taxable supply that attracts VAT at the rate of 18%.

The owner of an entertainment event whose annual turnover (sales) is UGX 150 million and above is expected to register for VAT and charge VAT on the ticket fee. The VAT must be declared in a return and remitted to URA.

To ensure compliance with this, URA officials need to be informed of any upcoming events and will be positioned at the concert/ event entrance to count and scrutinize tickets.

VAT on Sponsorship income

Where an events promoter receives sponsorship from any other company, he/ she must raise an invoice that is VAT inclusive through EFRIS to the sponsor.

The event owner is required to file and pay the VAT charged to URA within 15 days after the end of the month in which the event occurred.

Failure to furnish a return by the due date

A person who fails to furnish a tax return by the due date or within a further time allowed by the Commissioner is liable to a fine not exceeding Shs. 1,000,000 and failure to furnish the return within the time prescribed by a court to a fine not exceeding Shs. 2,000,000 on conviction.

Failure to pay tax

Failure to pay attracts interest at a rate of 2% per month if the tax is not paid.