Ministry of Culture calls for tax relief for performers

Earlier, it was reported that a draft resolution announced by the Ministry of Justice, titled “On simplifying the system of taxation and accounting for individuals engaged in concert and entertainment activities,” proposes requiring performers and hosts in Uzbekistan to pay taxes for each wedding or concert. Following the publication of the draft, the Ministry of Culture called for tax relief for performers.

According to the draft, performers, hosts, and other service providers in the concert and entertainment sector would be taxed for each appearance at weddings, anniversaries, circumcision ceremonies, marriage events, restaurants, and other functions under the “one service – one payment” principle.

On social media, some citizens have expressed the view that the principles of equality and fairness in taxation should be ensured. In particular, it has been noted that individuals working in various sectors, including low- and middle-income workers, private entrepreneurs, retail employees, drivers, and construction workers, already pay taxes in accordance with established procedures. This has led to questions about why a separate or different approach should be applied to certain individuals working in the entertainment sector.

According to the Ministry of Culture, the draft presidential resolution developed by the Ministry of Justice, titled “On reducing the shadow economy by simplifying the system of taxation and accounting for individuals engaged in concert and entertainment activities,” was thoroughly reviewed by the Ministry of Culture and the state institution Uzbekconcert.

Despite the Ministry of Culture submitting official objections to certain provisions of the draft in accordance with established procedures, the document was still put forward for public discussion by the Ministry of Justice.

At present, the procedure for taxation of individuals engaged in concert and entertainment activities is defined by existing legislation.

In particular, under the presidential decree of July 13, 2022, titled “On improving the system of collection of state duties and taxation of individuals engaged in concert and entertainment activities,” a mechanism has been introduced allowing such individuals to pay income tax either on a declaration basis or under a fixed system.

Under this system, performers pay a monthly social tax of no less than one base calculation unit, which currently amounts to 412,000 soums. In addition, they pay a 12 percent income tax on their annual income based on a declaration.

“This means that, under the current system, individuals working in the concert and entertainment sector are not outside the tax system. A legal taxation mechanism already exists and is being applied. Therefore, claims sometimes made in public discussions that ‘performers do not pay taxes at all’ do not fully reflect reality,” the ministry said in its statement.

According to the presidential decree of May 26, 2020, titled “On measures to further increase the role and influence of culture and art in society,” clear mechanisms have also been established to ensure that service fees and honoraria for creative professionals and performers involved in state-organized and other events are paid in accordance with the law. This has contributed to the development of transparent financial relations in the sector.

In this regard, the Ministry of Culture has proposed introducing certain relief measures into the draft resolution, revising implementation mechanisms, ensuring fair differentiation of tax rates by category, applying a differentiated approach for various participants in the sector, and further clarifying a number of provisions.

“The Ministry believes that public opinion, as well as the views of creative professionals and industry representatives, are of great importance in this matter. Any decision adopted should be based on the principles of legality, fairness, and practical effectiveness. The Ministry of Culture supports a constructive approach to discussions of this draft. Its main goal is, on the one hand, to ensure transparency and legality in the sector, and on the other, to maintain stable, fair, and practically acceptable conditions for creative activity,” the statement said.

It is worth noting that under the “one service – one payment” principle, the amount of tax depends on the performer’s rating and the venue, and is calculated based on the base calculation unit.