Musicians are not tax exempt
A person, who earns an income and fails to pay taxes, breaches a constitutional obligation. Ideally, musicians should file their income tax returns at the end of the year
By Herbert Ssempogo
DAYS after musician Joseph Mayanja a.k.a. Jose Chameleon received a sh14m tax invoice from Uganda Revenue Authority (URA), he was enraged.
The invoices were in respect of the performances he held from December 2011 to March 2012. Chameleone wondered how the revenue collectors computed them.
“My voice is a natural gift from God, why do you want me to pay for my voice?” a vexed Chameleone wondered.
However, all citizens worldwide have obligations to the state. One of them is paying taxes from which revenue is generated for provision of infrastructure and social services.
A person, who earns an income and fails to pay taxes, breaches a constitutional obligation.
Taxes could be direct, that is, pegged on income like Pay As You Earn or indirect like Value Added Tax (VAT) paid whenever an item is purchased.
Like any citizen with an income, musicians are not exempt from taxes.
Ideally, musicians should file their income tax returns at the end of the year. From the total income, a sh30% tax is levied.
However, because musicians’ income is largely seasonal, there are two friendly options for them.
One of them is that once a promoter hires them, that person withholds 6% of the total amount, which is handed over to URA as tax.
That person must be a withholding tax agent. While filing returns at the end of the year, a musician has to indicate how much tax was withheld by promoters.
Alternatively, 18% of VAT could be levied on the total gate collections. Under this arrangement, a URA official is supposed to be at the entrance to scrutinise receipts.
Taxing musicians is not a reserve of the Ugandan Government. Worldwide, this group has to fulfil obligations to the state. And there are repercussions for evasion.
The Daily Mail reported last week that the US artiste, R. Kelly, owes the state $4.8m in back taxes after ‘not paying anything’ on his superstar earnings for almost seven years.
The ‘I Believe I Can Fly’ singer stopped paying taxes in 2005, according to documents fi led by the Internal Revenue Service (IRS). In July 2011, Jeffrey Atkins (Ja Rule) was handed a 28-month prison sentence for failing to pay taxes on more than $3m in earnings between 2004–2006. Therefore, instead of complaining, Chameleone, who has a huge following, should comply.