OVERVIEW OF ENTERTAINMENT LAW AND ETHICS IN NIGERIA
Being a paper presented at the Effective Leadership and Management Skills Workshop organized by the National Association of Nigerian Theatre Arts Practitioners in collaboration with the National Institute for Cultural Orientation on Wednesday October 7, 2020
By Elvis E. Asia, Managing Partner, Law Future Partners (LFP), Lagos
The entertainment industry includes live performance, film, music, publishing, advertising, broadcasting, gaming, sports etc. The industry is massive contributing enormously to the nation’s gross domestic product. Nollywood, the most popular part of the industry is reported to be the third largest and fastest growing movie industry in the world, after Hollywood and Bollywood. The industry, like everything else, is founded and regulated by law. The body of law that regulates the industry is referred to as entertainment law.
Entertainment law refers to legal principles, rules and regulations, which are applicable to the entertainment industry. It involves many areas of law, which include the application of contract, corporate, finance, torts, immigration, privacy law, tax law, insurance law, employment and labor law and intellectual property law principles to the interactions between players in the entertainment industry.
Entertainment law covers a wide area including merchandising in the entertainment business, media including digital broadcasting and social media, sports, and gaming. Entertainment law has not been comprehensively developed in Nigeria. Various areas of law combine to make up entertainment law. The foundation of entertainment law is intellectual property law which includes Copyright, Trademarks, Industrial Designs and Passing Off. Others are contract law, employment and labour law, agency, advertising, international law, criminal law etc.
Attempt is made in this paper to highlight the major areas of entertainment law relevant to Theatre Art Practitioners.
The starting point in discussing entertainment law is entertainment rights which are constitutionally founded. Entertainment rights are essentially predicated on the constitution and common law. These rights include the right to freedom of expression and privacy.
Freedom of expression
Creativity is the hallmark of entertainment and it is expressed in various forms. Artistic creative expression is critical to entertainment and the development of vibrant cultures, innovation and the proper functioning of the democratic system.
The right to freedom of expression is a right, which seeks to protect, inter alia, artistic creativity and expression. The artistic right to freedom of expression covers all forms of human creative impulse including broadcasting, music, dance and movies. This right gives an artist power to say, write or design whatever he or she thinks without fear of retribution from the government (with certain exceptions designed to protect public safety and security). It is so fundamental to the essence of creativity that it is also guaranteed by the Universal Declaration of Human Right as well as the African Charter on Human and Peoples’ Right and other regional conventions.
Right to Privacy
Section 37 of the 1999 Constitution of the Federal Republic of Nigeria provides that “ The privacy of citizens, their homes, correspondence, telephone conversations and telegraphic communications is hereby guaranteed and protected”.
A person’s right to privacy is necessary to protect thoughts and sentiments expressed in artistic works. Failure to protect this right could lead to the inability of artists to express their creativity and eventually profit from it.
Breach of the right to privacy can occur in the following ways:
- Intrusion on private affairs. Eg., a celebrity may have a claim where paparazzi are constantly snapping photographs which invades his her privacy
- Disclosure of embarrassing private facts. E.g., publication of information relating to a music star’s sexual escapades that resulted in STDs which was obtained without authorization.
- Publicity which places the individual in a false light in the public eye. E.g., a celebrity whose relative was arrested for a crime may have a claim if a publication falsely places him/her as the one arrested or the connection between him and the person arrested is painted in a manner detrimental to his or her image.
- Appropriation of another’s name or likeness. E.g., Wizkid’s image is used to promote goods by a company without his permission.
Image Rights and Right of publicity
Image rights or right to publicity refer to a person’s right to commercialize his personality such as, name and nickname, voice, physical appearance/face, pictures or caricatures, signature, personal logos and slogans, and also the right to prevent other people from commercially making use of them. The other part of publicity right is the right to be left alone and not be represented publicly without permission. This is an aspect of the right that has its roots in the right to privacy. It is also referred to as personality right.
The right is largely a common law right in the tort of passing off but has been held to include the right to privacy. However, the difference between the right of privacy and publicity is that the right of privacy is an innate inherent right. Right of publicity, on the other hand, has to be acquired throughout one’s lifetime by creating economic value in one’s name, image or likeness. Privacy right also cannot be inherited as it is personal to the individual but the right of publicity is a property right which can be inherited.
Factors to be considered in entertainment professional’s right to privacy
- The right applies to the person and not property
- Consent waives the right
- If the information is considered news or considered news or news event, there can be no breach of privacy right
- The right can only be violated by a means of a permanent publication to a third party
- In some cases, the publication must result in profit or gain.
Loss of Right to Freedom of Expression and Privacy
The entertainer’s rights (freedom of expression and privacy) as defined above are not absolute. The rights can be deviated from in many circumstances. Section 45 of the constitution provides that:
Nothing in section 37, 38, 39, 40 and 41 of this Constitution shall invalidate any law that is reasonably justifiable in a democratic society:
(a) In the interest of defence, public safety, public order, public morality or public health or for the purpose of protecting the rights and freedom of other persons.
In line with the above, much legislation has been made to regulate the entertainment industry.
Others situations where these rights may be lost include estoppel, waiver, consent etc.
Obscenity and Censorship
One way government tries to protect public morality and the rights of other persons is through censorship of obscene materials. A material is considered obscene if it is so indecent that it would outrage the community’s notion of decency. Laws and legal principles against obscenity are concerned with prohibiting lewd, filthy, violent or disgusting words or pictures.
The prohibition of obscenity has constitutional foundation in section 45 of the constitution. The section allows the state to enforce public morality.
Obscenity is censored and regulated in all ramifications and expressions. In the digital space, the Cybercrimes (Prohibition, prevention, etc.) Act, 2015 (CCA) regulates obscenity. Section 23 of the Act prohibits child pornography and related offences with a 10 years imprisonment or fine of N20m or both. Also, section 24(1)( a) of the CCA provides thus:
Any person who knowingly or intentionally sends a message or other matter by means of computer systems or network that- (a) is grossly offensive, pornographic or of an indecent, obscene or menacing character or causes any such message or matter to be so sent;’
Is guilty of an offence and liable to 3 years imprisonment or fine of N7m or both.
The definition of computer in the CCA includes obscenity in the social media sphere.
Defamation is a tort involving false statements about a person that are communicated to another person, the result of which is ridicule or contempt of the person about whom they were made. Defamation can either be verbal (slander) or written (libel). The right to freedom of expression does not protect defamatory statements.
Regulation of the Entertainment Industry in Nigeria
We have established above that the entertainer’s right to freedom of expression and creativity can be limited by government to protect public morality. The protection of public morality is a wide responsibility. In order to fulfill that duty, various laws have been made to regulate the practice of entertainment. The overriding aim of law is to establish minimum standards and threshold to protect societal values and norms. The following are the major regulatory agencies in the entertainment industry:
- The National Broadcasting Commission (NBC)- This is a parastatal of the federal government, empowered to regulate the broadcasting industry. It was established pursuant to the section 1 of the National Broadcasting Commission Act. The following are the functions of the commission:
- Receiving, processing, and considering applications for the ownership of radio and television stations including cable TV services, direct satellite broadcast, etc.
- Regulating and controlling the broadcasting industry;
- Receiving, considering and investigating complaints from individuals and bodies regarding content of a broadcast or conduct of a station;
- Upholding the principles of equity and fairness in broadcasting;
- Establishing and disseminating a national broadcasting code and setting standards with regards to contents and quality of broadcasting
- Regulating ethical standard and technical excellence.
- Promoting Nigerian indigenous cultures, moral and community life through broadcasting.
- Determining and applying sanctions, including revocation of licences of defaulting stations.
- Ensuring quality manpower development in the broadcasting industry by accrediting curricula and programmes for all tertiary institutions that offer Mass Communication in relation to broadcasting;
- Intervening and arbitrating in conflicts in the broadcasting industry.
- Advising the federal government on the implementation of the national mass communication policy.
- Upholding the principle of fairness and equity in broadcasting.
- Ensuring strict adherence to laws and regulations.
- Serving as national consultant on legislative or regulatory issues on broadcasting.
See sections 3-8 on composition of the commission, sections 9- 14 for the powers to grant licenses.
Note also that pursuant to its powers stated above, the Commission made the Nigeria Broadcasting Code, setting out standards with regards to content and quality of broadcasting in Nigeria. The Code was recently reviewed with wide effect on the entertainment industry. The review introduced far reaching provisions with considerable effect on the entertainment industry.
- The National Film and Video Censors Board (NFVCB)- The National Film Video Censors Board was set up by National Film and Video Censors Board Act  to regulate films and video industry in Nigeria. The Board is empowered by law to classify all films and videos whether imported or produced locally. It is also the duty of the Board to register all films and videos outlet across the country and to keep a register of such registered outlets among other functions. The functions of the Board are:
- To license a person to exhibit films and video works,
- To license a premises for the purposes of exhibiting films and video works,
- To censor and classify films and video works;
- To regulate and prescribe safety precautions to be observed in licensed premises;
- To regulate and prescribe safety precautions to be observed in licensed premises;
- To regulate and control cinematographic exhibitions; and
- To perform such other functions as are necessary or expedient for the full discharge of all or any of the functions conferred on it by this law.
See section 2 of the law.
The establishment of the Board therefore empowers it to assess, classify and register films and video works and the film outlets across the country monitor the films and film outlets.
The Act sets out a number of various infringements which include the distribution/exhibition of unapproved (uncensored/unclassified) films/video works and musical videos; forging the Board’s certificates/ licences; distributing/exhibiting of pornographic films; broadcasting unapproved (uncensored/unclassified) films/video works by satellite/ cable television operators; exhibition of films with restricted classification to under-age persons; exhibition of films classified as “for restricted exhibition” in registered/licensed premises; failure of distributors/ exhibitors to distribute films in the film format for which they are intended (home entertainment format or public exhibition format).
Note also the NFVCB regulation 2008.
- Nigerian Copyrights Commission (NCC)-The NCC was established by section 34(1) of the Copyright Act with the following functions:
Be responsible for all matters affecting Copyright in Nigeria.
b. Monitor and supervise Nigeria’s position in relation to international Conventions and advise the government thereon.
c. Advice and regulate conditions for the conclusion of bilateral and multilateral agreements between Nigeria and any other Country.
d. Enlighten and inform the public on matters relating to copyright.
e. Maintain an effective data bank on authors and their works.
f. Be responsible for such other matters as relate to Copyright in Nigeria.
In addition to the above, the Copyright Commission has the powers to receive and grant application for compulsory license, appointment of copyright inspectors etc. The commission also has the power to approve and register collecting societies.
- Nigerian Film Corporation (NFC)- the corporation was created under the Nigerian Film Corporation Act to aid the development of the film industry. The Corporation has the following functions –
(a) the production of films for domestic consumption and for export;
(b) the establishment and maintenance of facilities for film production;
(c) the encouragement of production by Nigerians of films through financial and other forms of assistance;
(d) the encouragement of the development of cinematograph theatres by Nigerians by way of financial and other forms of assistance;
(e) the acquisition and distribution of films;
(f) the establishment and maintenance of national film archives;
(g) the provision of facilities for training and advancing the skills and talents of persons employed in the Nigerian film industry generally and the conduct of research into the matters pertaining to film production and the film industry as a whole; and
(h) the carrying out of such other activities as may be necessary or expedient for the full discharge of all or any of the functions conferred on it under or pursuant to this Act.
- Collecting Societies– a collecting society is an association of copyright owners, which has as its principal objectives the negotiation, and granting of licenses, collecting and distributing of royalties in respect of copyright works. The NCC may register a collecting society if it is registered as a company limited by guarantee, has as its main objective, the negotiation, and granting of copyright licenses and collecting royalties on behalf of owners and distributing same to them. See section 39. Examples are the copyright society of Nigeria (suspended in May 2018), Musical Copyright Society, Audiovisual Rights Society of Nigeria (LTD/GTE) (AVRS) (Collective Management Organization for films in Nigeria) and Reproduction Rights Society of Nigeria (REPRONIG) (Literary Field).
Protection Of Creativity
Creativity which is the hallmark of the entertainment industry is largely protected by Intellectual Property Law. Intellectual Property Law protects man’s creativity by granting various intellectual property rights (IP). IP rights are exclusive proprietary rights granted by law to the owners, over intangible assets which are innovative products of the brain or the mind, as opposed to personal or real properties. The most common intellectual property rights are copyright, trademark, patent and designs. For the purpose of this presentation, emphasis will be on copyright protection.
A copyright is a legal right that grants the creator of an original work exclusive right to its use and distribution, usually for a limited time. In Nigeria, copyright is governed by the Copyright Act, and the body charged with the enforcement and protection of copyright is the Nigerian Copyright Commission (NCC). Copyrights are conferred on works whose author or in the case of a work of a joint authorship, any of the author is a citizen of Nigeria or domiciled in Nigeria or a body corporate incorporated under the laws of Nigeria.
Copyrights are also conferred on works arising from international agreements where at the date of first publication, one of the authors is a Nigerian citizen or domiciled in Nigeria; or published in a country that is a party to an obligation in a treaty or agreement in which Nigeria is a party as well as works published by United Nations Organizations or any of its specialized agencies, African Union and the Economic Communities of West African States.
Works eligible for copyright include:
- Literary works – books, computer programmes, letters, reports, tables/compilations etc
- Artistic Works – paintings, maps, diagrams, sculpture, photography, Architectural drawing etc
- Musical Works – compositions and accompaniments
- Cinematographic films – films and soundtracks
- Sound recordings- recorded music, songs, audio books, sound effects, audio recordings of speeches & interviews, audio podcasts, soundtracks ; and
- Broadcasts – Radio, TV, satellite, cable wireless etc
Qualification for copyright protection
- Originality- this means sufficient effort must have been expended on making the work to give it an original character
- Fixation in a definite medium of expression- copyright protects expression of idea. Therefore, to qualify for protection, the work must be fixed in a definite medium of expression now known or to be developed.
Protection of Folklore
“Folklore” is widely defined under the Copyright Act to mean a group-oriented and tradition-based creation of groups or individuals reflecting the expectation of the community as an adequate expression of its cultural and social identity, its standards and values as transmitted orally, by imitation or by other means including- (a) folklore, folk poetry, and folk riddles; (b) folk songs and instrumental folk music; (c) folk dances and folk plays; (d) productions of folk art in particular, drawings, paintings, carvings, sculptures, pottery, terracotta, mosaic, woodwork, metalwork, handicrafts, costumes, indigenous textiles.
Expressions of folklore are protected against- (a) reproduction; (b) communication to the public by performance, broadcasting, distribution by cable or other means; (c) adaptation, translation and other transformations, when such expressions are made either for commercial purposes or outside their traditional or customary context.
It is a criminal offence to use folklore without the permission of the Nigerian Copyright Commission (NCC) and only the commission can institute an action in respect thereof.
What these provisions mean, is that communities cannot even protect their culture. They would have to depend on a federal body to do so. This is an aberration in a diverse country such as Nigeria. Folklores are being commercialized and adapted into dance, music and movies on a daily basis without the communities benefiting from it. Given that the communities have been stripped of the right to protect their heritage, they are left without remedy. The NCC seems not to be interesting in monitoring and sanctioning appropriation of folklores.
This is the right of performers to exclusively control, in relation to their performance, the performing, recording, broadcasting live, reproducing in material form and adapting of the performance. Performers’ rights are protected as a neighboring right in the Copyrights Act. The other neighboring right is protection of folklore which we already discussed.
Performers are actors, singers, musicians, dancers and other persons, who act, sing, deliver, declaim, play in, or otherwise perform literary or artistic works. A performer a person carrying out activities such as acting, dancing, singing, recitation or other live performance alone, or along with other persons.
The qualifying factor is that the performance is a live performance as the objective of the law is to protect works which might not otherwise qualify for protection as copyright on the basis of non fixation. The Act describes Performance to include a dramatic performance (which includes dance and mime); a musical performance and a reading or recitation of literary act or any similar presentation which is or so far as it is, a live performance given by one or more individuals.
Performers have certain rights to prevent illicit recordings of their performances. Performers’ rights are infringed when, for example, a recording of a performance is made without the performer’s consent and the recording is broadcast, shown, played, copied, imported or sold. The exclusive rights of a performer subsist in in relation to the performance until the end of the period of fifty years from the end of the year in which the performance first took place.
A performers’ right is infringed by a person who, without the performers’ consent or authorization in writing does any of the following:
- makes a recording of the whole or substantial part of a live performance: Provided that where the consent sought is to make a recording of the work for research, private or domestic use, such consent shall not be unreasonably refused;
- broadcasts live, or includes live in a cable program, the whole or a substantial part of the live performance;
- performs in public the whole or a substantial part of the performance;
- shows or plays in public the whole or a substantial part of the performance for commercial purposes;
- broadcasts, or includes in a cable programme, a substantial part of the performance by means of recording which is, and which that person knows or has reason to believe was made without the performers’ consent;
- imports into the country otherwise than for his private or domestic use, a recording of a performers’ work which is an infringing recording; or
- In the course of trade or business, sells or lets for hire, offers, distributes or displays for sale or hire a recording of a performers’ work which is an infringing recording.
An infringement of a right of a performer as stated above is actionable by the person entitled to the right, as a breach of statutory duty. Notwithstanding the civil liabilities for the infringement of performance rights, a person who does any of the infringing acts shall, unless he proves to the satisfaction of the Court that he did not know that his conduct was an infringement of the performers’ right, be liable on conviction ‐
- in the case of an individual, to a fine not exceeding N 10,000;
- in the case of a body corporate, to a fine of N50, 000;
Limitations to the Rights of Action of a Performer
- Ignorance: the infringer may escape liability if he can prove to the satisfaction of the Court that he did not know that his conduct was an infringement of the performer’s rights.
- Importation for private or domestic use: there is no infringement in respect of importation into the country of an infringing recording of a performers’ work, where such importation of an infringing recording of a performers’ works is for private or domestic use. This implies that only importation for business or commercial purpose is actionable, however, the ‘infringer’ may escape liability if the public use is accompanied by an acknowledgement of the title of the work and its source.
- Protection of Public interest: with regard to the making of a recording of a live performance, where the consent of the performer is sought to make a recording of the performance for research, private or domestic use, such consent shall not be unreasonably refused.
- Education: the utilization of the performance for the purpose of education
- Illustration of original work: the utilization of the performance by way of illustration in an original work of an author provided that the extent of such utilization is compatible with fair practice.
Copyright and Piracy In Nigeria
Piracy is the illegal and unauthorized reproduction or duplication of copyright works like phonograms, books, paintings, architectural drawings, photographs, films, broadcasts, computer software etc, for commercial purpose. It is distinguishable from plagiarism, which is the deliberate presentation of another person’s original ideas or creative expression as one’s own.
Remedies for copyright infringement
The author’s remedy for infringement of copyright could be civil or criminal. Both remedies can be pursued at the same time.
Civil remedies includes:
- Anton Pillar Order- this order authorizes the Applicant to enter the house in which infringement is suspectd in the company of a police officer to seise, detain and preserve the infringing copies and inspect documents in the custody of the defendant. The application is made ex parte. See section 25
- Accounts- this will be granted when the defendant was not aware or had no reasonable ground for suspecting that copyright subsisted in the work. See section 16(3)
- conversion rights- infringing copies are deemed to be the property of the author or assignee or licensee and a recovery action may be brought. See section 18
- Fair compensation
Piracy is a crime in Nigeria. Section 20(2) of the Copyright Act criminalises piracy in all its forms.
Trade Mark is very important to brand protection in the entertainment industry. A Trade Mark is any mark, word, phrase, logo, signature or other graphic symbol by which a product or service is specifically identified. A trade mark is a means of identifying the origin of the goods and services in question. It is a sign used in relation to goods or services for the purpose of indicating a connection in the course of trade between goods and services and the user of the mark. The right granted by such registration is the exclusive right to use the mark in Nigeria in relation to the goods for which it is registered.
Qualification for registration
- The mark must be a “mark” within the meaning of the This includes a name, signature, word, label, number, brand, heading, letter or device or any combination of these.
- The mark must be distinctive, non descriptive and non deceptive as to origin or quality of the goods. Thus marks which are too similar to existing registrations in respect of the same goods will be rejected except where the two marks have previously been used honestly and concurrently.
Trademarks in Nigeria are generally registerable for an initial period of seven (7) years from the date the application for registration is submitted. Afterwards, a Trade Mark is renewable for fourteen (14) years at any one time. See the Trademarks Act.
The registration of a Trade Mark confers on the Owner or on its registered user the exclusive right, to the exclusion of all others, to the use of the Trade Mark in relation to the class or classes of goods against which the Trade Mark has been registered. Registration of a Trade Mark does not however interfere with any person’s bona fide use of his own name or the name of his place of business which must be registered, or the name or names of any of his predecessors in such a business.
In entertainment law, artists often have a stage or brand name. The protection of the name raises important issues. This may become very pronounced where an artist is signed to a record label. In the event of dispute, the question arises as to who has the brand or stage name or whether the artist can use the name after leaving a record label or producer. This will be resolved by reference to registration of the stage name or whether or not the artist is licensed to the record label or producer or assigned to it.
A Patent is a monopoly over the exploitation of an invention given by the government to the inventor in return for the inventor disclosing the full working of his invention. An invention can be defined as a new solution to a technical problem. An invention could be an entirely new solution or an improvement of an existing solution.
To be Patentable, the invention must
- is new or novel;
- involves an inventive step (“not obvious”);
- is capable of industrial application (“useful”);
- is not specifically excluded in the Act (e.g. inventions the publication of which may encourage immoral and offensive behaviour).
Novel simply means it must be new. Inventive step means that it goes beyond the general knowledge in that field; it must be “non-obvious” to an average practitioner of that field. Industrial Application means that it must be capable of practical use; it produces a defined end that is useful.
An Industrial Design (also called Design Patent) protects the ornamental or aesthetic aspects of a useful article. It protects the unique “look and feel” of the product. It is different from a trademark because it doesn’t need to be distinctive. It could be 2 or 3 dimensional e.g. packaging, pattern or shape. To be registrable, it must be “new” or “original”. It must “appeal to the eye” meaning that it has an attracting and not just a functional effect. It must also be capable of reproduction by industrial means.
Industrial Design is granted for a total of 15 years renewable in 5 year intervals under the Patents and Designs Act. Patents are granted for a fixed number of 20 years by the Patents and Designs Act and are subject to annual renewal within the period of validity.
Passing off is a common law tort which can be used to enforce unregistered trade mark rights. The tort of passing off protects the goodwill of a trader from misrepresentation and prevents a person from misrepresenting goods or services as being the goods and services of another. It also prevents a trader from holding out his or her goods or services as having some association or connection with another when this is not true. The following elements must be proved to establish the tort:
- Damage to goodwill
Contractual relations in Entertainment Industry
Contracting is very important in the entertainment industry. There is a common challenge today arising from contracts signed by parties in the industry which were not well thought out. Most actors and actresses sign contracts at their vulnerable moments when they can easily be manipulated and exploited. It is therefore important for entertainers to have some understanding of contract and the major clauses that are relevant to their practice.
A contract is a written or oral agreement that is intended to be enforceable by law.
Elements of a valid contract
The following are the elements of a valid contract:
- an intention to create a legal relationship.
A contract may be oral or written; however, certain contracts must be in writing and signed in order to be valid. Examples of such contracts are contracts involving infants.
Also contracts that will continue beyond the lifetime of a party performing the contract
Capacity to contract
For a contract to be valid, the parties must have capacity to contract. Capacity in this sense refers to the fact that they must be of age, be of sound mind and must not be disqualified by law. Capacity to contract is important in entitlement contract because in most cases, entertainers are infants, illiterates etc.
Contracts by Illiterates.
An illiterate is a person who does not understand the language in which a contract is made. To be valid, a contract with an illiterate must be read and explained to him/her before it is signed or thum printed. The writer of the contract must also write his/her name and address.
At common law, an infant is a person under the age of 21. Contracts entered into with an infant are voiadable at the instance of the infants. However, contract for the supply of necessaries are valid. Necessaries are goods that are important for the survival of the infant depending on the societal status of the infant. They are food, shelter, clothing etc.
The above position has been modified by the Child’s Right Act. Under the Child’s Right Act, a child is someone under the age of 18. Contracts entered into by a child for repayment of money lent or for payment of goods supplied to the child, shall be void.
Because of this legal disability, Companies normally require that the minor’s parents execute a valid release, under which they guarantee the services of the child and agree to be held liable for damages if the child fails toperform under the terms of the contract
Persons of Unsound Mind
Contract made by lunatics or persons of unsound mind are voidable except made during lucid intervals. Contracts for necessaries are also enforceable.
Contract made by drunks are voidable except it can be proved that the contract was made when they were sober. Contracts for necessaries are also enforceable.
Major Clauses in Entertainment Contracts
Irrespective of the nature of the contract in the entertainment industry, the following clauses should be carefully watched by players in the industry:
- Assignment or licensing
- Term/duration of contract
Taxation of Entertainment Industry
A tax is compulsory contribution to state revenue, levied by the government on workers’ income and business profits, or added to the cost of some goods, services, and transactions.
There is no special legal regime for taxation of the entitlement industry.
The types of taxes entertainers may be exposed to include:
Personal Income Tax
The Personal Income Tax Act governs taxation on personal income. Players in the entertainment industry who are resident in Nigeria are liable to tax in Nigeria, on their worldwide income subject to applicable international treaties. Such tax would be assessed, collected and enforced by the relevant State Internal Revenue Service (SIRS) where the individual is deemed, resident. Exemptions, reliefs and allowances apply like other industries. For example, where income is earned abroad and brought into Nigeria through approved channels in foreign currencies and paid into a local domiciliary account, it would be exempted from tax.
Under Nigerian Personal Income Tax Laws all taxable persons are entitled to a consolidated relief allowance of 20% of gross income plus higher of 1% of gross income or N200,000.
The tax rate payable is:
|Annual Taxable Income||Rate|
There are 2 ways of paying personal income tax –
Pay-As-You-Earn (PAYE) – this is how people in paid employment pay their taxes. The employer deducts the tax at source.
Self assessment by self employed persons – if self-employed you assess on your taxes, and pay the amount directly to the relevant tax authorities.
Companies income tax
This is the tax payable by companies on their profit after deduction of allowable expenses. It is the rate of 30%. Entertainment companies pay taxes on their profit under the Companies Income Tax Act.
|Category||Annual Turnover (NGN)||Tax Rate|
|Small Company||25m or less||0%|
|Medium-sized company||More than 25m but less than 100m||20%|
|Large Company||100m and above||30%|
A withholding tax is the tax required by law to be withheld by a party from each payment made to another contracting party from the income or services rendered. Such tax withheld must be added up on monthly basis and remitted directly to the Federal Inland Revenue Service (for withholding tax on limited liability companies) or State Internal Revenue Service (for withholding tax on individuals and enterprises).
|Types of payment||WHT for companies (%)||WHT for individuals (%)|
|Dividends, interest, and rents||10||10|
|Hire of equipment||10||10|
|Commission, consultancy, technical, service fees||10||5|
|Construction/building (excluding survey, design, and deliveries)||5||5|
|Contracts other than sales in the ordinary course of business||5||5|
Value added tax
This is a consumption tax payable on goods and services at the rate of 7.5%. It is governed by the Value Added Tax Act.
Capital gain tax
Capital Gains tax is 10% of the profits from the sale of the qualifying assets. It is recognized in law under the Capital Gains Tax Act . Qualifying assets are options, debts, incorporeal property like copyrights, currencies other than the Naira.
Other taxes relevant to the entertainment industry
In the FCT Abuja, there is an Entertainment Tax Act pursuant to which the Entertainment and Event Centre Fee Regulations 2014 was made by the Minister of FCT Abuja, to charge fees on consumption of entertainment and leisure goods and services which includes hotel, hotel facility other hospitality or leisure facilities or other event centres, as well as subscriptions on paid television network, internet facilities or traveling agency services. There is also a similar law in Lagos and Ogun States.
Law is sine qua non to the entertainment industry and indeed any human venture. The underlying foundation is the constitutional and international rights to freedom of creativity and expression. Entertainment law is a wide subject but attempt has been made to highlight the major areas.
Thank you for listening.
 See Section 39(1) of the 1999 Constitution (as amended)
 See also Article 19 (2) of the International Covenant on Civil and Political Rights (ICCPR)
 In the Estate of Elvis Presley v Russen (513 F Supp 1339 (1981), 1353); Brotman J. defined the ‘right of publicity’ as “…the right of an individual, especially a public figure or a celebrity, to control the commercial value and exploitation of his name and picture or likeness and to prevent others from unfairly appropriating this value for their commercial benefit.”
 Note that defamation is also a crime under section 373 of the criminal code. See also section 24(1) (b) of CCA
 . Cap NII, LFN, 2004
 The new provisions include requirement for Web/online broadcasting registration, director(s) and author(s) of a broadcast programme targeting Nigerians should be Nigerian(s), all platforms at an agreed fee, rights owners to live foreign sporting events are mandatorily required to offer the rights to broadcasters on (i) Satellite DTH; (ii) Multipoint Microwave Distribution System (MMDS); (iii) Cable (Fibre Optics; (iv) DTT (Terrestrial); (v) Internet; (vi) Mobile; (vii) Internet Protocol Television (IPTV); and (viii) Radio, prohibition of exclusive and access for Pay TV platforms. While the goals of the code may be laudable, there are practical and legal hurdles to its effective implementation.
 Cap N40 LFN, 2004
 See sections 31- 33 of the Act
 See section 24