They say money makes the world go round, and for governments, it is taxes that keep the country running.
In Ghana, every road built, hospital staffed, or school opened depends in part on the taxes collected. That’s why no sector generating significant revenue can escape the tax net.
Article 174(1) of the 1992 Constitution of Ghana grants Parliament the authority to impose taxes, and the money raised contributes a significant portion of government revenue each year.
The event space within the entertainment industry is not exempted from this.
Concerts, festivals, comedy shows, and theatre productions are believed to generate substantial income, which is why stakeholders within the creative economy are expected to meet their tax obligations.
Who falls under the tax net?
The entertainment industry is broad, with many moving parts. Organizers bring events to life, actors and artistes perform, vendors sell food and merchandise, and venue owners provide the spaces.
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Each of these groups has unique tax responsibilities clearly outlined by law.
Tax responsibilities in detail
Organizers:
Taxation for organizers begins with ticket sales. Every ticket sold must include Value Added Tax (VAT) at the standard rate, which organizers are required to collect and file monthly.
Depending on whether the organizer is an individual or a company, they must also pay either Personal Income Tax or Corporate Income Tax on their profits.
In addition, any time organizers pay actors or rent a venue, they are expected to withhold taxes on those payments.
Actors and performers:
Actors and performers are taxed on various income streams, not just from live performances but also from royalties, endorsements, and merchandise.
At the end of each year, they must file annual tax returns. Any taxes previously withheld are credited to them.
Endorsements specifically attract a 10% final withholding tax.
If a performer sells merchandise and qualifies for VAT registration, they are required to charge and remit VAT monthly.
Vendors:
Vendors who sell food, drinks, or souvenirs at events are also not exempted. They must file tax returns and, where eligible, charge VAT on their sales.
Payments made to venue owners by vendors also attract withholding tax.
Venue owners:
Venue owners are expected to register with the Ghana Revenue Authority (GRA), charge VAT on rentals, and file monthly VAT returns, as well as annual income tax returns.
Registering to pay taxes
No business in Ghana can operate legally without registering with the Ghana Revenue Authority.
This applies to entertainment events as well. The VAT Act clearly states that any promoter of public entertainment must register at least 48 hours before the event if they expect to earn more than GHS 10,000 within a twelve-month period.
“Public entertainment” under the law includes music, comedy, theatre, dance, festivals, circuses, and other similar shows. In practice, nearly all entertainment events fall under the GRA’s oversight.
VAT deductions and ticketing
The law provides some relief in the form of input tax deductions, allowing businesses to deduct certain expenses directly related to their operations before paying VAT to the GRA.
In entertainment, this could include costs like hiring venues for official events or providing meals at product launches.
However, not all costs qualify. For instance, a restaurant can deduct VAT on food supplies but not on entertainment provided exclusively for staff.
Ticketing has evolved:
Traditionally, event organizers were required to purchase VAT coupons from the GRA and issue them to patrons at the gate.
Today, digital ticketing has simplified the process. Tickets sold via USSD codes or online platforms already include VAT, making compliance and monitoring much easier.
Rights and responsibilities
Industry players within the creative economy are required to:
Keep proper records
File taxes on time
Issue VAT invoices for all taxable transactions
Important Deadlines:
PAY returns: 15th of every month
Annual returns (individuals and companies): By end of April
VAT returns: Last working day of the following month
Taxpayer rights:
The right to object to unfair tax assessments
The right to apply for exemptions (if qualified)
The right to request tax clearance certificates
The right to privacy and confidentiality of personal tax data
Are these taxes actually paid?
According to a GRA officer who spoke on condition of anonymity, VAT on event tickets is often accounted for, mainly because GRA officials are stationed at event gates to monitor ticket sales.
However, many event organizers fail to pay withholding taxes, largely because they are not even registered with the GRA.
“For the VAT on program tickets, they account for it because GRA sends staff to the gate to monitor. But when it comes to withholding on venue charges and payments to performers, most organizers are not even registered,” he said.
References:
VAT Act, 2013 (Act 870) as amended
Income Tax Act, 2015 (Act 896) as amended
VAT Regulations, 2016 (L.I. 2243)
SCG Consulting – VAT Basics
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