The Institute of Certified Public Accountants of Uganda (ICPAU) has urged government to raise the proposed withholding tax on public entertainers from 6% to 15%, arguing that the move would help formalise taxation within the fast-growing entertainment sector.
Presenting the proposal before Parliament’s Finance Committee, Silajji Kanyesigye Baguma, Chairperson of ICPAU’s Taxation and Economic Policy Panel, said the measure targets an emerging sector that has largely operated outside the formal tax system.
“The proposed tax targets an emerging and previously undertaxed entertainment sector,” Kanyesigye said, adding that applying a 15% withholding tax on gross payments “would boost revenue while formalising taxation among creatives and individuals earning outside traditional employment.”
However, ICPAU cautioned that the law must clearly define what constitutes public entertainment to avoid ambiguity and potential unfair taxation.
Kanyesigye warned that vague provisions could wrongly capture private functions such as weddings and graduation ceremonies.
“We need to define what is public entertainment and private entertainment—start with concerts, radios and TVs,” he said. “But private functions, my son’s wedding, those should be kept as private functions, and this shouldn’t apply at the moment.”
He further clarified: “If I invite Chameleon to come at my home and sing for me and my guests, I don’t think that is a public function. The Shs1 million I am paying him shouldn’t be subject to this clause.”
Members of Parliament raised concerns about the practicality of implementing the tax, particularly for individuals organising private events.
Keffa Kiwanuka questioned whether requiring private organisers to withhold and remit taxes would place an undue burden on the public.
“I am surprised that you are okay with withholding tax on entertainers, by whoever organises that entertainment,” Kiwanuka said. “How do you feel if you had a party and you are asked to withhold the tax on the entertainer? Doesn’t it become a burden and cause anxiety on the public?”
ICPAU also supported withholding tax proposals on insurance agents, mobile money agents, and gaming and betting winnings, while stressing the need for clear definitions to ensure effective implementation and compliance.
On a separate issue, the institute expressed concern over repeated tax exemptions granted to the Bujagali Electricity Company, urging Parliament to adopt a long-term solution rather than revisiting the matter annually.
Kanyesigye said the exemptions have been renewed multiple times and should not continue indefinitely.
“We shouldn’t be doing a legislative every year on the same thing,” he said. “Maybe we give the exemption, but require offloading of shares to the local community so that dividends remain in the country and Ugandans gain ownership.”
Maximus Ochai sought clarification on the institute’s position, noting that its earlier submission appeared frustrated. ICPAU maintained that a more sustainable approach, including possible local ownership conditions, would better address the long-standing Bujagali tax exemption issue
