As the government continues to focus on building the much needed infrastructure such as roads, dams, schools and health facilities in a bid to drive the country into a middle income economy by 2020, there is immediate need to widen the domestic tax base where finances to fuel this cause should be derived.
Government expenditure for the 2017/18 financial year was estimated to be UGX 29 trillion. Uganda Revenue Authority was expected to collect about UGX 15 trillion in taxes. The tax base is definitely small and the government continuously has to find external sources of money to fully finance its expenditures.
The music industry has potential to contribute to tax revenue, job creation and investment but it’s free flowing gold and honey haven’t been tapped to realize a significant rise in tax revenue. But that’s all about to come to an end, maybe.
The music industry has developed an application that could earn the government millions of shillings in tax revenue while improving the welfare of musicians.
This comes as an effort to professionalize the industry which has for so long not directly contributed to tax revenue. “We believe it’s time to start paying taxes and at the same time earn decently from our sweat” said President of save Ugandan music and Swangz Avenue Boss, Julius Kyazze.
Sauteez app was launched last year in December. Once fully operationalised, it will carry all Ugandan music and will be the sole purchase point. A song will cost UGX 1,000 locally and USD 1 for those in the diaspora. Uploading the Music on the app is free of charge. The payments are integrated on mobile money, credit and debit cards in Uganda and abroad to make it even more convenient.
On purchase of a song, the musician gets 60%, the government 18% and the remaining 22 percent is retained for maintenance of the application.
Uganda Musicians Association says there are over 500 musicians in the country and over two million records have been recorded over the past five years. Free music download sites let tens of millions of downloads to the people which if they were through the Sauteez app would fetch the government billions of shillings in tax revenue.
The only bottleneck the full operationalizing of the app faces is enforcement of the copyright laws whose infringement denies musicians and the government legitimate income. Currently the app can be used on smartphones but will be integrated for feature phones, for those who do not have smartphones.