When online revenue meets the tax net

For years, it sounded harmless, almost clever. “This money is from online, it’s PayPal, it’s just Tiktok gifts. URA can’t see it.”

That belief has powered Uganda’s digital hustle culture: creators filming in bedrooms, influencers closing brand deals over WhatsApp, gamers earning live donations, bloggers cashing AdSense cheques, largely convinced that the internet was a tax-free zone.

But as Uganda’s tax system modernizes, that comfort has evaporated. The internet did not remove tax; it merely delayed the conversation. And that conversation has now arrived.

With over 13 million internet users and more than 10 million active social-media accounts, Uganda’s digital economy is no longer fringe, it is mainstream. Thousands of Ugandans earn real money from YouTube, Tiktok, Instagram, Facebook, X (Twitter), blogs, gaming platforms and freelance marketplaces.

To the Uganda Revenue Authority (URA), this explosion sends one clear signal: income has gone digital, and taxation has followed it there.

This is the most expensive lie circulating among digital creators today. Uganda’s tax law does not care where income is earned, it cares that income is earned.

Whether money comes from a shop counter, a consultancy contract, or a viral video, it remains income if it arises from an activity carried on for gain.

URA does not classify YouTubers, Tiktokers or influencers as a special class of taxpayers. From a tax perspective, a content creator is simply a self-employed person running a business, no different from a designer, musician, consultant or trader.

The camera replaces the office, the algorithm replaces the shop, but the income remains taxable.

Uganda’s Income Tax Act does not tax platforms; it taxes income. Under Section 19 of the Income Tax Act, tax is charged on every person who derives chargeable income. Chargeable income includes income from business, profession or vocation, regardless of how or where it is earned.

This means income earned through algorithms, views, clicks, subscriptions or brand partnerships is not exempt simply because it is digital. The phone, camera or laptop is merely the tool, the income remains taxable.

URA views digital creators as persons carrying on a business or profession, even where operations appear informal. Consistency of posting, monetization strategies, contracts with brands, and repeat earnings demonstrate intention to earn, which is a key test of business income.

Modern tax administration no longer relies solely on voluntary disclosure. Bank data, payment service providers, lifestyle indicators and third-party intelligence increasingly highlight undeclared digital income. Public brand endorsements combined with silent tax records are now red flags.

Digital income is generally treated as business income: Income is aggregated and taxed under individual income tax bands or presumptive tax (for small turnover earners).

Allowable deductions under Section 22 include production equipment, internet, software, marketing, professional services and other business costs.

Where payments are made by Ugandan companies, withholding tax may apply at source under the general withholding tax rules.

There is no special “social media tax” simply for being online. Digital creators are taxed the same way as any other taxpayer, based on income earned.

Today’s creators earn from multiple platforms, often at the same time. YouTube pays advertising revenue and memberships. Tiktok pays through LIVE gifts, creator funds and brand partnerships. Instagram and Facebook facilitate sponsored posts, reels bonuses and affiliate income.

X (formerly Twitter) now shares ad revenue and subscriptions. Bloggers earn from Google AdSense and sponsored content. Gamers stream on Twitch and Facebook Gaming. Freelancers earn from Upwork, Fiverr and direct foreign clients.

Payments arrive through banks, mobile money, PayPal, Wise, Skrill and intermediaries. The payment method does not change the tax position.

Another popular belief is that foreign platforms place income outside URA’s reach. The law disagrees. Resident Ugandans are taxable on worldwide income, meaning earnings from Google, Meta, Tiktok or any foreign brand are still taxable in Uganda.

Foreign origin is not foreign immunity. URA increasingly relies on bank transaction data, payment service providers, third-party intelligence and lifestyle indicators. Public brand endorsements combined with silent tax records are now obvious red flags. The system no longer waits for creators to announce success, it detects it.

Digital income is treated as business income. Creators are taxed on profits, not gross receipts. Allowable expenses, equipment, internet, software, production costs and professional services, reduce taxable income.

Small creators may fall under presumptive tax, while growing creators move into normal income tax bands. Where Ugandan companies pay influencers, withholding tax may apply as advance tax. 

URA’s approach has shifted from chasing paperwork to following data. Creators who register early, keep basic records and declare honestly often find compliance manageable. Those who wait until visibility catches up often face retrospective assessments that wipe out years of earnings in one letter.

Likes may be free. Views may be free. But money earned online is not.

Digital creation is no longer informal, it is visible, traceable and assessable. The question for Uganda’s creators is no longer whether digital income is taxable, but whether you will comply early or explain later. Because in today’s tax environment, the internet is no longer hiding income. It is highlighting it.

The writer is a Chartered Accountant, and a chartered Tax Advisor.