Ugandan Artistes Push Back Against Proposed Tax Increase

Uganda’s creative industry is once again at the center of a heated debate, as a new proposal to significantly increase taxes on entertainers has drawn sharp criticism from musicians and other industry players.

At the heart of the controversy is a recommendation by the Institute of Certified Public Accountants of Uganda to raise the withholding tax on performers from the current 6 percent to at least 15 percent.

The proposal was tabled before Parliament as part of wider efforts to widen the tax base and streamline revenue collection within the country’s growing creative economy.

While policymakers argue that the move could help boost national revenue, many in the entertainment sector see it as a threat to their livelihoods.

Leading the pushback is Phina Mugerwa, also known to fans as Phina Masanyalaze, who has openly criticized the proposal. Speaking on behalf of the Uganda Musicians Association, she warned that such a steep increase could place unbearable pressure on artistes already navigating an unpredictable income stream.

According to Mugerwa, the proposal signals a disconnect between policymakers and the realities of the creative industry. She noted that industry stakeholders had previously held discussions with the Uganda Revenue Authority to shed light on how artistes earn and sustain themselves. For many, the renewed push for higher taxation feels like those efforts were overlooked.

ALSO READ: “It Felt Like the End”: Larry Madowo’s Story of Uganda’s Tear Gas

Her argument is simple: you can’t heavily tax an industry that still lacks consistent structural support.

Beyond opposing the increase, creatives have also floated alternative solutions. One such idea involves revisiting the Private Copy Remuneration system by introducing a modest levy, around one percent, on imported digital devices like smartphones and laptops.

The suggestion is that funds generated from such a levy could be pooled into a central fund to support artists and strengthen the industry. So far, however, that proposal remains untouched.

The debate comes at a critical time, as Parliament’s Finance Committee reviews several tax-related bills ahead of approving the 2026/27 national budget.

The government projects the budget at Shs84.2 trillion, a notable jump from the current Shs72.1 trillion, underscoring the urgency to increase revenue streams.

Under the existing proposal, a 6 percent withholding tax is expected to generate approximately Shs4.2 billion annually.

This tax is deducted at source by event promoters, meaning artistes receive a reduced payout from their agreed fees. For example, a performer booked for Shs1 million would walk away with Shs940,000.

However, advocates of the increase, including ICPA-U representatives like Silajji Kanyesigye Baguma, believe a higher rate could unlock significantly more revenue—potentially up to Shs10.5 billion each year.

They argue that the entertainment industry remains largely under-taxed despite its rapid growth and rising commercial value.

Still, for many artistes, the numbers tell a different story. If the rate rises to 15 percent, earnings from the same Shs1 million performance would drop to Shs850,000—fueling fears that the policy could shrink already tight margins and discourage growth in the sector.

As discussions continue, the standoff highlights a broader question: how can governments effectively tax emerging creative industries without stifling them?

For Uganda’s entertainers, the answer may lie not just in taxation, but in creating an ecosystem where the industry can first thrive before being asked to contribute more.