Vision
Mission
A world class model of excellence in revenue
administration and trade facilitation.
To optimise and sustain revenue collection
and administration for a prosperous
Zambia.
Our commitment to serving Government,
taxpayers, employees and other stakeholders
is reflected in our Corporate Values:
Our Values
Taxpayer Focus
Integrity
Professionalism
Innovation
Networking
Tag Line
i
My Tax, Your Tax, Our Destiny
1.0
FOREWORD
2
3
PART I: SUMMARY OF AMENDMENTS
2.0
THE INCOME TAX (AMENDMENT) ACT NO. 24 OF 2022
3.0
THE INCOME TAX (TRANSFER PRICING) (AMENDMENT) REGULATIONS, STATUTORY
INSTRUMENT NO. 89 OF 2022 4.0
4
THE INCOME TAX (LOCAL CONTENT ALLOWANCE) REGULATIONS, STATUTORY INSTRUMENT
NO. 82 OF 2022
5
5.0
THE PROPERTY TRANSFER TAX (AMENDMENT) ACT NO. 27 OF 2022
5
6.0
THE MINES AND MINERALS DEVELOPMENT ACT NO. 29 OF 2022
5
7.0
THE VALUE ADDED TAX (AMENDMENT) ACT NO. 26 OF 2022 6
8.0
THE VALUE ADDED TAX (EXEMPTION) (AMENDMENT) ORDER STATUTORY INSTRUMENT NO.
87 OF 2022
9.0
6
THE VALUE ADDED TAX (ZERO-RATING) (AMENDMENT) ORDER STATUTORY INSTRUMENT NO.
86 OF 2022 10.0
6
THE VALUE ADDED TAX (GENERAL) (AMENDMENT) REGULATIONS STATUTORY INSTRUMENT
NO. 91 OF 2022
11.0
7
THE VALUE ADDED TAX (ELECTRONIC FISCAL DEVICE) (AMENDMENT) REGULATIONS, 2021
STATUTORY INSTRUMENT NO. 88 OF 2022
7
12.0
THE CUSTOMS AND EXCISE (AMENDMENT) ACT NO. 25 OF 2022
7
13.0
THE CUSTOMS AND EXCISE (MANUFACTURING LICENCE) (EXEMPTION) REGULATIONS,
STATUTORY INSTRUMENT NO. 97 OF 2022
8
PART II: COMMENTARY ON AMENDMENTS
14.0
THE INCOME TAX (AMENDMENT) ACT NO. 24 OF 2022
9
15.0
INCOME TAX (TRANSFER PRICING) (AMENDMENT) REGULATIONS, STATUTORY INSTRUMENT
No. 89 OF 2022 21
16.0
INCOME TAX (LOCAL CONTENT ALLOWANCE) REGULATIONS, STATUTORY INSTRUMENT NO.
82 OF 2022
21
17.0
THE PROPERTY TRANSFER TAX (AMENDMENT) ACT NO. 27 OF 2022
22
18.0
THE MINES AND MINERALS DEVELOPMENT ACT NO. 29 OF 2022 26
19.0
THE VALUE ADDED TAX (AMENDMENT) ACT NO. 26 OF 2022 28
20.0
THE VALUE ADDED TAX (EXEMPTION) (AMENDMENT) ORDER STATUTORY INSTRUMENT NO.
87 OF 2022 30
21.0
THE VALUE ADDED TAX (ZERO-RATING) (AMENDMENT) ORDER STATUTORY INSTRUMENT NO.
86 OF 2022 31
ii
22.0
THE VALUE ADDED TAX (GENERAL) (AMENDMENT) REGULATIONS STATUTORY INSTRUMENT
NO. 91 OF 2022 33
23.0
THE VALUE ADDED TAX (ELECTRONIC FISCAL DEVICE) (AMENDMENT) REGULATIONS, 2021
STATUTORY INSTRUMENT NO. 88 OF 2022 34
24.0
THE CUSTOMS AND EXCISE (AMENDMENT) ACT NO. 25 OF 2022
25.0
THE CUSTOMS AND EXCISE (MANUFACTURING LICENCE) (EXEMPTION) REGULATIONS,
STATUTORY INSTRUMENT NO. 97 OF 2022
35
39
PART III: OTHER MATTERS
26.0
TAX TREATMENT OF EMPLOYMENT BENEFITS
40
26.1
PAYMENTS THAT ARE NOT SUBJECT TO PAY AS YOU EARN (PAYE)
42
27.0
TAX TREATMENT OF CERTAIN EXPENSES
42
27.1
TAX TREATMENT OF EXPENSES INCURRED ON ENTERTAINMENT, HOSPITALITY AND GIFTS 42
27.2
TAX TREATMENT OF CANTEEN EXPENSES, REFRESHMENTS AND FOOD RATIONS 42
28.0
PAYMENTS ON CESSATION OF EMPLOYMENT
43
28.1
TAX TREATMENT OF PAYMENTS MADE ON MEDICAL DISCHARGE
43
29.0
TAX TREATMENT OF ADVANCE AGAINST GRATUITY, PENSIONS AND EMPLOYEE PENSION
WITHDRAWALS BY AN INDIVIDUAL CONTINUING IN EMPLOYMENT
43
30.0
TAX TREATMENT OF SETTLING IN ALLOWANCES
43
31.0
TAX INCENTIVES FOR A RURAL ENTERPRISE
43
32.0
TREATMENT OF FORFEITURE AND SURRENDER OF SHARES
44
33.0
PAY AS YOU EARN (PAYE) REFUNDS
44
34.0
ADMINISTRATION OF THE DISABILITY CREDIT AND DEDUCTION FOR EMPLOYING PERSON
WITH A DISABILITY 46
35.0
TAXATION OF PAYMENTS TO NON-RESIDENT CONTRACTORS FOR HAULAGE OPERATIONS 47
36.0
TAX TREATMENT OF EMPLOYMENT INCOME EARNED IN ZAMBIA FROM NON-RESIDENT
EMPLOYERS
48
48
37.0
MIGRATION FROM TURNOVER TAX TO INCOME TAX
38.0
TREATMENT OF CERTAIN WINNINGS UNDER GAMING AND BETTING
48
39.0
VALUE ADDED TAX TREATMENT OF VARIOUS SERVICES 49
39.1
HIRE OF EQUIPMENT FOR LOADING AND OFFLOADING OF PASSENGERS FROM AIRCRAFT
49
39.2
LOADING OF CARGO FOR EXPORT FROM ZAMBIA
49
39.3
OFFLOADING OF CARGO FROM OUTSIDE ZAMBIA
49
39.4
ANCILLIARY SERVICES RELATING TO GOODS TRANSITING THROUGH ZAMBIA
49
39.5
COLD CHAIN SERVICES
49
39.6
CLEARING AND FORWARDING SERVICES
49
iii
40.0
PARTIAL APPORTIONMENT FOR LEASING
50
41.0
VAT TREATMENT OF IMPORTED SERVICES (REVERSE VAT)
50
42.0
RECOVERY OF VAT CHARGED ON EXEMPT SUPPLIES OR VAT CHARGED BY A NON-REGISTERED
SUPPLIER
50
43.0
INVOICES TO SUPPORT INPUT CLAIM
50
44.0
ZERO-RATING LOCAL PURCHASE 50
45.0
COMMISSION EARNED BY INSURANCE
46.0
CLEARING OF GOODS USING GOVERNMENT VOUCHERS 51
47.0
PENALTY FOR UNDERDECLARING TOURISM LEVY
51
48.0
TAX RATES
51
49.0
MISCELLANEOUS MATTERS
60
50.0
ZAMBIA REVENUE AUTHORITY CONTACT ADDRESSES 64
50
1
1.0 FOREWORD
This Practice Note describes the various changes introduced by the:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Income Tax (Amendment) Act No. 24 of 2022
Income Tax (Transfer Pricing) (Amendment) Regulations, Statutory Instrument No. 89 of 2022
Income Tax (Local Content Allowance) Regulations, Statutory Instrument No. 82 of 2022
Property Transfer Tax (Amendment) Act No. 27 of 2022
Mines and Minerals Development Amendment Act No. 29 of 2022
The Value Added Tax (Amendment) Act No. 26 of 2022
The Value Added Tax (Exemption) (Amendment) Order Statutory Instrument No. 87 of 2022
The Value Added Tax (Zero-Rating) (Amendment) Order Statutory Instrument No. 86 of 2022
The Value Added Tax (General) (Amendment) Regulation Statutory Instrument No. 91 of 2022
The Value Added Tax (Electronic Fiscal Device) (Amendment) Regulations, 2022 Statutory Instrument
No .88 of 2022
11. The Customs and Excise (Amendment) Act No. 25 of 2022
12. The Customs and Excise (Manufacturing Licence) (Exemption) Regulations, Statutory Instrument No. 97
of 2022
The commentary in this Practice Note is for general guidance only and is not to be taken as a legal authority in
any proceedings. The information provided is not exhaustive and does not affect any person’s right of appeal
on any point concerning a person’s liability to tax, nor does it preclude any discretionary treatment which may
be allowed under the law.
Note that regarding Excise Duty, only matters relating to domestic Excise Duty have been included in this
Practice Note.
Any enquiries regarding the content of this document may be made through the Zambia Revenue Authority
(ZRA) National Call Centre, your nearest Customer Experience Centre or any ZRA Office.
Dingani Banda
COMMISSIONER-GENERAL
2
PART I:
THE INCOME TAX (AMENDMENT) ACT NO. 24 OF 2022
2.0
Subject
Section
Title and commencement
1
(i)
Introduces definitions of the following:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
2 (1)
(ii)
(iii)
(iv)
(v)
artisanal mining licence;
child of the family;
electronic fiscal device;
gig economy;
mining licence;
public private partnership project
savings group;
small mining licence; and
special purpose vehicle.
Aligns the definition of a child in line with the Legitimacy Act
Provides that both residents and non-residents in respect to purchase price are covered under
royalty financing arrangement.
Broadens the definition of royalty to incorporate technological advancements.
Reduces minimum age to 16 from 18, for issuance of TPIN.
55A
Introduces a requirement for taxpayers to interface their systems with ZRA system.
55B(1)
Introduces an obligation for taxpayers to use an electronic fiscal device.
55B(2)
Allows the Commissioner General to approve the use of documents, devices or equipment other than
electronic fiscal devices.
55B(3)
Prescribes the penalties for non-compliance with respect to the use of electronic fiscal devices.
64A(2A)
Allows persons in the gig economy to account for tax under the Turnover Tax regime
77(1E)
Prescribes the payment date for provisional tax where registration for income tax occurs after 31st March.
82A(1)(j)
Removes the requirement to deduct withholding tax from payments of premiums for reinsurance and
retrocession placed with non-resident reinsurers.
82A(1)(k)
Renumbers (k) as (j), following the deletion of (j).
100(1)(e)(iv)
Specifies the penalties with respect to presumptive tax on gaming machines and casino games.
100(1)(e)(v)
Renumbers the section following the insertion of subparagraph (iv).
Second Schedule Para
5(1)(n)
Exempts a pension scheme approved under the Pension Scheme Regulation Act 1996, from income tax.
Second Schedule Para
6A(1)
Clarifies that interest income on treasury bills, government bonds, corporate bonds or any financial
instrument or securities received by any public benefit organisation, body, person or trust is not exempt
from tax.
Fourth Schedule
Removes the provisions relating to the approval of pension schemes from the Income Tax Act.
Fifth Schedule Para 1(4)
(i)
Increases the allowable expenditure for the construction or acquisition of employee housing to K100,000
from K20,000.
Fifth Schedule Para
10(8)
Introduces an accelerated rate of wear and tear allowance on a straight-line basis under a Public Private
Partnership Project.
Sixth Schedule Para 1
Increases the farm improvement allowance to K100,000 from K20,000.
Ninth Schedule Part II
Introduces a tax free threshold on turnover tax.
3
Ninth Schedule Part III
Ninth Schedule Part IV
Charging Schedule Para
1(1)(b)
Charging Schedule Para
2(1)(c)(d)(e) and (f)
Reduces the presumptive tax to 15% from 25% on land-based (brick and mortar) betting companies and
to 15% from 35% on Lottery winnings (brick and mortar) for the 2023 and 2024 charge years.
Introduces a presumptive tax rate for income earned from artisanal and small-scale mining.
Increases the tax credit for persons with disabilities to K7,200 per annum from K6,000 per annum.
(i)
Increase the Pay As You Earn tax free threshold for an individual to K57,600 per annum from
K54,000 per annum;
(ii) Reduces the marginal tax rate for the second income bracket to 20%; and
(iii) Adjusts the income bands accordingly.
Charging Schedule Para
3(1)(c)
Introduces a single tax rate of 35% for the telecommunication sector.
Charging Schedule Para
3(1)(d)
Removes the 40% tax rate on income exceeding K250,000 for telecomunication companies.
Charging Schedule Para
3(1)(d) and (e)
Renumbers item (e) as (d) following the deletion of item (d).
Charging Schedule Para
5(e)
Introduces graduated bands on rental income received from the letting of property.
Charging Schedule Para
5(j)
Charging Schedule Para
5(k)
Charging Schedule Para
5(l)
Charging Schedule Para
6(f)
Charging Schedule Para
7(viii)
Charging Schedule Para
7(x)
Charging Schedule Para
7(xi)
Charging Schedule Para
7(xii)
3.0
Regulation
1
22A(2)
22A(7)(c)
4
Introduces income tax concessions on income generated from local sales of corn starch by agroprocessing businesses operating in a Multi-Facility Economic Zone or Industrial Park.
Reduces the Corporate Income Tax rate to 25% from 30% on income earned from value addition to
gemstones through lapidary and jewellery facilities.
Prescribes a 15% tax rate for the first five years that a special purpose vehicle makes a profit under a
Public Private Partnership project
Introduces a 0% tax rate on dividends on income generated from manufacturing of corn starch.
Reduces the tax rate to 15% from 20% on winnings from gaming and betting for the 2023 and 2024
charge years.
Reduces the withholding tax rate to 0% from 15% on interest earned by individuals from loans advanced
to members under the savings groups.
Introduces a withholding tax rate of 0% on interest income earned from green bonds listed on a
securities exchange.
Reduces the withholding tax rate to 0% from 15% on interest earned from a Life Insurance policy.
THE INCOME TAX (TRANSFER PRICING) (AMENDMENT) REGULATIONS, STATUTORY
INSTRUMENT NO. 89 OF 2022
Subject
Title and Commencement
Provides for the use of a single currency for the threshold for Country-by-Country reporting as
prescribed by the OECD.
Provides that an entity resident in Zambia that is not an ultimate parent entity or surrogate parent entity
is required to file a country-by-country report where the state of tax residence of the surrogate parent
4.0
Regulation
1
2
5.0
Section
1
2
4(2)
5(2A)
5(2B)
5(2C)
5(2D)and (2E)
5(3)
5(5A)
6(1)
9(2)(b)(i)
9(3)
9(3),(4),(5) and (6)
6.0
1
89(2)
entity has not notified the Commissioner-General of a systemic failure.
INCOME TAX (LOCAL CONTENT ALLOWANCE) REGULATIONS, STATUTORY INSTRUMENT
NO. 82 OF 2022
Subject
Title and Commencement
Includes tomato to the schedule listing the agricultural products that are allowed for the local content
allowance.
PROPERTY TRANSFER TAX (AMENDMENT) ACT NO. 27 OF 2022
Subject
Title and Commencement
(i)
Excludes an interest in a mining right and an interest in a mineral processing license from the
definition of a mining right and a mineral processing license.
(ii)
Includes an interest in a mining right and an interest in a mineral processing license in the definition
of share.
(iii)
Introduces the definition of a Financial Service Provider
Reduces the property transfer tax rate on the transfer of mining rights held by exploration companies to
5% from 10%.
Clarifies that the proportion applicable to the value of the share for the Zambian company will be used in
determining the realised value.
Removes reference to the effective shareholding when determining a transfer has a nil realised value.
Deletes the definition of effective shareholding.
Renumbers subsections (2D) and (2E) as subsections (2C) and (2D) following the deletion subsections
(2C).
Removes reference to an interest in a mining right.
Allows for the use of the actual price receivable in determining the realised value for the disposal of
distressed property by a financial services provider.
Exempts the surrender or forfeiture of shares from property transfer tax where there is no consideration.
Prescibes that, the provisional return shall be submitted to the Commissioner-General, in relation to land.
Deletes a redundant provision since returns are submitted to the Commissioner-General and not the
Commissioner of Lands.
Renumbers subsections (4), (5), (6) and (7) as subsections (3), (4), (5) and (6) following the deletion
subsection (3)
THE MINES AND MINERALS DEVELOPMENT AMENDMENT ACT NO. 29 OF 2023
Title and Commencement
Restructures the calculation of Mineral Royalty on copper to tax only the incremental value in each price
range.
5
7.0
Section
1
2
7A
18(4)
44(1)
8.0
Paragraph
1
2
Item 1
Item 10
Item 16
9.0
Paragraph
1
2
Group 2
Group 4
Group 7
Group 8
Group 12
6
THE VALUE ADDED TAX (AMENDMENT) ACT NO. 26 OF 2022
Subject
Title and commencement
Extends the definition of a commercial property to include land designated or sold for commercial
purposes.
Aligns the section heading to the changes effected by Amendment Act number 44 of 2021.
Clarifies the validity period of a tax invoice or other documentary evidence used to claim input tax.
Increases the penalty under section 44(1) to K90,000 from K9,000.
THE VALUE ADDED TAX (EXEMPTION) (AMENDMENT) ORDER STATUTORY INSTRUMENT
NO. 87 OF 2022
Subject
Title and commencement
(i)
Extends the definition of poultry to include quails and guinea fowls.
(ii)
Introduces the definition of “project” as defined in the Public Private Partnership Act, 2009.
(iii) Introduces the definition of “public private partnership” as defined in the Public Private
Partnership Act, 2009.
Exempts Betting, Gaming and Lotteries from VAT.
Includes the machinery and equipment imported for use under Public Private Partnership projects to
the list of exempt items.
Includes horses that are imported as breeding stock to the list of exempt items.
THE VALUE ADDED TAX (ZERO-RATING) (AMENDMENT) ORDER STATUTORY
INSTRUMENT NO. 86 OF 2022
Subject
Title and commencement.
Introduces the definition of “special purpose vehicle” as provided in the Income Tax Act.
(i) Excludes from zero-rating standard rated goods imported by the President.
(ii) Zero-rates goods and services supplied to a special purpose vehicle during the construction period.
Limits the zero-rating of the raw materials under Group 4 to manufacturers of mosquito nets.
(i) Clarifies that only solar batteries are zero-rated and extends the zero-rating to
Lithium ion batteries for use with solar equipment.
(ii) Deletes paragraph (j) and (l), and renumbers paragraph (k) as paragraph (j).
Extends the zero-rating to milk cans, churns and milking machines.
Extends the Zero-Rating Order by the addition of a new group of selected Information and
Communication Technology items.
10.0
Regulation
1
2
13
11.0
Regulation
1
2
7
11
12.0
Section
1
2
93
THE VALUE ADDED TAX (GENERAL) (AMENDMENT) REGULATIONS, 2022 STATUTORY
INSTRUMENT NO. 91 OF 2022
Subject
Title and commencement
Introduces the definition of the Zambia Tourism Agency as established in the Tourism and Hospitality
Act, 2015.
Specifies the qualifying categories of intending traders under exploration.
THE VALUE ADDED TAX (ELECTRONIC FISCAL DEVICE) (AMENDMENT) REGULATIONS,
2022 STATUTORY INSTRUMENT NO.88 OF 2022
Subject
Title and commencement
Introduces a definition of an inspection log book.
Provides for the use of an accounting software that is integrated with the tax invoice management system
for the issuance of a tax invoice.
Provides a requirement for taxpayers to maintain log books in electronic or physical form.
THE CUSTOMS AND EXCISE (AMENDMENT) ACT NO. 25 OF 2022
Subject
Title and Commencement
(i)
(ii)
Broadens the definition of manufacture and manufacturer to provide for extracted goods.
Introduces the definition of electronic fiscal device.
(i)
Provides for the Minister to prescribe the goods that may be exempted from the requirement to
obtaining a licence.
Rearranges subsections (2) and (3) as subsections (3) and (4).
(ii)
151
188A
198
Makes it an offence to charge excise duty or surtax contrary to the provisions of the Customs and Excise
Act.
Provides for a requirement for a licensee and service provider to use an Electronic Fiscal Device (EFD to
Issue a tax invoices and provides for penalties for non-compliance.
Provides that the Minister may issue regulations to prescribe the conditions for the supply and use of
EFD or other equipment.
Second Schedule Heading
Reduces the excise duty rate on methylated spirits to 60% per litre from 125% per litre.
6(2)
Second Schedule Heading 7
(i) Increases the specific excise duty rates on unmanufactured and tobacco refuse to K361 per kg from
K355 per kg.
(ii) Increases the specific excise duty rates on cigars, cheroots, cigarillos and cigarettes, of tobacco or
tobacco substitutes to K361 per mille from K355 per mille.
(iii) Increases the specific excise duty rates on water pipe tobacco, cutrag, other manufactured tobacco,
manufactured tobacco substitutes, homogenised or reconstituted tobacco, and Other to K361 per kg
7
Second Schedule Heading
12
Second Schedule Heading
13
Second Schedule
Seventh Schedule
13.0
Regulation
1
2
8
from K355 per kg
Introduces excise duty on various articles of plastic at the rate of 15%.
Introduces excise duty on electronic cigarettes and similar personal electric vaporising devices at the
rate of 145%.
Rearranges headings (13) and (14) as heading (14) and (15).
Clarifies that the price to be used when determining the value for duty purposes (VDP) on air time is
the full price paid or payable by the consumer of the service.
THE CUSTOMS AND EXCISE (MANUFACTURING LICENCE) (EXEMPTION) REGULATIONS,
STATUTORY INSTRUMENT NO. 97 OF 2022
Subject
Title and commencement
Specifies goods for which a licenced manufacturer is not required to obtain a licence.
PART II:
COMMENTARY ON AMENDMENTS
14.0
THE INCOME TAX (AMENDMENT) ACT NO. 24 OF 2022
14.1
SECTION 1: TITLE AND COMMENCEMENT
This Act comes into operation on 1st January, 2023.
However, Sections 55A and 55B (Electronic Fiscal Devices) shall come into operation on a date that the Minister will appoint
by statutory instrument.
14.2
SECTION 2: INTERPRETATION
14.2.2 Section 2 (1) of the principal Act is amended by the introduction of the following new definitions:
“artisanal mining licence” has the meaning assigned to the words in the Mines and Minerals Development Act, 2015.
“child of the family” has the meaning assigned to the words in the Children’s Code Act, 2022.
“gig economy” is a segment of the digital economy which involves individuals carrying out business through an online platform
and under flexible or temporary conditions, and includes an independent contractor or freelancers conducting business through
an online platform.
“mining licence” has the meaning assigned to the words in the Mines and Minerals Development Act, 2015.
“savings group” includes village banking and a co-operative society.
“small mining licence” has the meaning assigned to the words in the Mines and Minerals Development Act, 2015.
“special purpose vehicle” means a company incorporated in the Republic by a successful bidder for the purpose of undertaking a
public private partnership project in accordance with the Public Private Partnership Act, 2009;.
The amendment introduces the above definitions.
14.2.3 Section 2 (1) of the principal Act is amended by the introduction of the following new definition:
“electronic fiscal device” means an electronic device, approved by the Commissioner-General, which has a fiscal memory capable
of generating and storing fiscal information and has the capacity to generate or record data and other reports and is capable of
transmitting that data in real time to the Authority.
The amendment introduces the definition of an Electronic Fiscal Device (EFD). The use of EFDs has now been extended to
other tax types administered under the Income Tax Act.
14.2.4 Section 2 (1) of the principal Act is amended by the introduction of the following new definition:
“public private partnership project” means a project that shall be transferred back to the Republic that involves the (a)
design, finance, construction, development or operation of a new infrastructure, asset or facility;
(b)
provision of social sector services; or
(c)
rehabilitation, modernisation, expansion, operation or management of an existing infrastructure, asset or facility.
The amendment introduces the definition of public private partnership project. This project should be a partnership between
the private entity and the Government of the Republic of Zambia. In addition, full ownership of the infrastructure, assets or
facility will be transferred to the Government after the period of the partnership elapses.
14.2.5 Section 2(1) of the principal Act is amended by the deletion of the definition of child and the substitution therefor of the
following:
“child” for tax purposes, includes a child of the family or any child to whom an individual stands in the place of a parent;
The amendment redefines the term “child” for income tax purposes. The change has been made to remove the word illegitimate
from the definition of a child to align with the Legitimacy Act Chapter 52 of the Laws of Zambia and the United Nations
Convention for the Rights of the Child.
9
14.2.6 Section 2(1) of the principal Act is amended by the deletion of the definition of purchase price and the substitution therefor
of the following:
“purchase price” is the amount paid by a person or partnership to a person or partnership resident in the Republic in return for
future payments of commodity royalty;
The amendment provides that both residents and non-residents, in respect to purchase price, are covered under royalty
financing arrangements or general agreements.
14.2.7 Section 2(1) of the principal Act is amended by the deletion of the definition of royalty and the substitution therefor of the
following:
“royalty” means a payment of any kind received as a consideration for the use of, or the right to use:
a. any copyright of literary work;
b. any artistic or scientific work including cinematograph films, films, video tapes, sound recording or any other like medium;
c. any computer programme or software;
d. any patent, trademark, design or model, plan, secret formula or process;
e. any industrial, commercial or scientific equipment; or
f. any information concerning industrial, commercial or scientific experience.
The amendment broadens the definition of a royalty to incorporate payments for the right to use a computer programme or
software.
Further, the amendment extends the definition to include other media of broadcasting. This is because content developers are
more likely to have their content broadcasted through an online streaming service.
14.2.8 Section 2(1) of the principal Act is amended by the deletion of the definition of taxpayer identification number and the
substitution therefor of the following:
“taxpayer identification number” means a number designated and issued by the
Commissioner-General to –
(a)
(b)
a corporate person or unincorporated body of persons; and
an individual who has attained the age of 16 years.
The amendment reduces the minimum age to 16 years from 18 years for issuance of a Taxpayer Identification Number (TPIN)
to an individual. Individuals that have attained the age of 16 years will now be able to obtain a TPIN because they are in
possession of the National Registration Card (NRC). The NRC is one of the mandatory requirements for issuance of the TPIN.
14.3
SECTION 55A and 55B: ELECTRONIC FISCAL DEVICE
14.3.1 The principal Act is amended by the insertion of the following new section 55A immediately after section 55:
55A. A person or partnership carrying on a business shall submit to the Commissioner General all
Business transactions in real time as prescribed.
The amendment introduces a requirement for taxpayers to interface their systems with the Zambia Revenue Authority (ZRA)
system. This means that business transactions that will be captured in real time will be specified by the Minister through a
Statutory Instrument.
Note:
This provision shall come into operation on the date that the Minister will determine through a Statutory Instrument.
14.3.2 The principal Act is amended by the insertion of the following new section 55B(1) immediately after section 55A:
55B (1) A person and partnership carrying on a business shall use an electronic fiscal device to
record sales for income tax purposes.
This amendment makes it mandatory for taxpayers to use an electronic fiscal device to record sales for income taxes such as
corporate income tax, turnover tax, rental income tax and presumptive tax on gaming and betting. Prior to this amendment,
the use of electronic fiscal devices was only applicable to value added tax, insurance premium levy and tourism levy.
Note:
This provision shall come into operation on the date that the Minister will determine through a Statutory Instrument.
10
14.3.3 The principal Act is amended by the insertion of the following new section 55B(2) immediately after Section 55B (1):
(2) Despite subsection (1), the Commissioner-General may approve the use of a document, device or equipment, other than an
electronic fiscal device, for a certain category of persons or partnerships carrying on a business.
The amendment allows the Commissioner-General to approve the use of documents, devices or equipment other than
electronic fiscal devices for recording transactions by certain businesses, for tax purposes.
14.3.4 The principal Act is amended by the insertion of the following new section 55B(3) immediately after section 55B (2):
(3) A person who contravenes this section commits an offence and is liable, on conviction, in the case of (a) a first offence, to a penalty not exceeding thirty thousand penalty units;
(b) a second offence, to a penalty not exceeding sixty thousand penalty units; and
(c) a third offence or subsequent offence, to a penalty not exceeding ninety thousand penalty units.
The amendment prescribes the penalties for non-compliance with respect to the use of electronic fiscal devices and other
approved documents, devices or equipment. An offender will therefore be liable to penalties as follows:
(a)
(b)
(c)
14.4
Up to a maximum of K9,000 for a first offence;
Up to a maximum of K18,000 for a second offence; and
Up to a maximum of K27,000 for a third offence
SECTION 64A: STANDARD ASSESSMENT
Section 64A of the principal Act is amended by the insertion of the following new subsection immediately after subsection (2):
2A) Despite subsection (2), the Commissioner General may make a standard assessment requiring—
(a) a person conducting business through the gig economy, with an annual turnover of eight hundred thousand Kwacha or
less, to pay tax on turnover at the rate set out in Part II of the Ninth Schedule; and
(b) a holder of a mining licence to carry out artisanal mining or small scale mining, with an annual turnover of eight
hundred thousand Kwacha or less, to pay tax on turnover as set out in Part IV of the Ninth Schedule.
This amendment allows individuals conducting consultancy business on digital platforms (gig economy) such as independent
contractors or freelancers to account for tax under the turnover tax regime, if their turnover is K800,000 or below.
Prior to this amendment, these individuals were paying their tax under the income tax regime. However, following this
amendment, these individuals will be required to register under turnover tax.
Further, the amendment introduces a presumptive tax regime on income earned from artisanal and small-scale mining at the
applicable turnover tax rate, if their turnover is K800,000 or below. Previously, all mining entities were subject to income tax
irrespective of the turnover.
14.5
SECTION 77: COLLECTION, RECOVERY, REFUND AND RELIEFS
Section 77 of the Principal Act is amended by the insertion of the following new sub-section immediately after sub-section
(1D):
(1E) The due date for the payment of a provisional return submitted by a person who registers after 31st March of any charge
year, shall be within 90 days from the date of registration.
This amendment prescribes the due date for payment of the provisional tax where registration for income tax occurs after 31st
March (between 1st April and 31st December). The due date for the payment of the provisional tax will be 90 days from the
date of registration.
14.6
SECTION 82A: DEDUCTION OF TAX FROM CERTAIN PAYMENTS
14.6.1 Section 82A (1) of the principal Act is amended by the deletion of paragraph (j);
This amendment removes the payment of withholding tax on reinsurance and retrocession placed with reinsurers not licenced
in Zambia.
11
14.6.2 Section 82A (1) of the principal Act is amended by renumbering of paragraph (k) as paragraph (j).
This amendment renumbers paragraph (k) as paragraph (j) following the deletion of paragraph (j) which relates to payment
of withholding tax on reinsurance and retrocession placed with reinsurers not licenced in Zambia.
14.7
SECTION 100: PENALTY FOR INCORRECT RETURNS, ETC.
14.7.1 Section 100 (1)(e) of the principal Act is amended by the insertion of the following new subparagraph immediately after item
(iii):
(iv) in relation to a person required to pay presumptive tax under Part III of the Ninth Schedule (A)
half the amount of the undeclared tax in the case of negligence;
(B)
the full amount of the undeclared tax in the case of wilful default;
(C)
one and half times the amount of the undeclared tax, in the case of fraud.
This amendment provides specific penalties for negligence, willful default and fraud with respect to presumptive tax on
betting and gaming.
Example 1: Penalties for undeclared Tax
If the undeclared tax is for a taxpayer is K20,000, the penalties will vary depending on the offence committed. The commutation
is as shown below:
Table 1: Computation of Penalties
14.7.2 Section 100 (1)(e) of the principal Act is amended by the renumbering of subparagraph (iv) as subparagraph (v).
This amendment renumbers the section to take into account the insertion of subparagraph (iv) which
covers the penalties under gaming and betting.
14.8
SECOND SCHEDULE: EXEMPTIONS
14.8.1 The Second Schedule to the principal Act is amended in paragraph 5(1), by the insertion of the following new item immediately
after item (m):
(n) pension scheme approved under the Pensions Scheme Regulation Act, 1996;
This amendment exempts a pension scheme approved under the Pensions Scheme Regulation Act, 1996 from income tax.
Prior to this amendment, a Pension Scheme approved under Pension Scheme Regulation Act was subject to further approval
by the Commissioner-General under the Fourth Schedule to the Income Tax Act in order to qualify for exemption.
14.8.2 The Second Schedule to the principal Act is amended in paragraph 6A by the deletion of the word “withholding”.
6A (1) Notwithstanding the provisions of sub-paragraph (1) of paragraph 5 and sub-paragraph (1) of paragraph (6), or any
other provisions of this Act, any interest on treasury bills, government bonds, corporate bonds or any financial instrument or
securities received by any public benefit organisation, body, person or trust referred to in those paragraphs, shall be subject
to tax under section eighty-two A.
This amendment clarifies that interest income on treasury bills, government bonds, corporate bonds or any financial
instrument or securities received by any public benefit organisation, body, person or trust is not exempt from tax. The payer
will still be required to withhold tax on interest payment from the specified instruments.
14.9
FOURTH SCHEDULE: APPROVED FUNDS
The principal Act is amended by the repeal of the Fourth Schedule.
12
The amendment removes the provisions relating to the approval of pension schemes from the Income Tax Act in order to
restrict the approval provisions to the Pensions Scheme Regulation Act, 1996.
14.10 FIFTH SCHEDULE: CAPITAL ALLOWANCES FOR BUILDINGS, IMPLEMENTS, MACHINERY AND PLANT, AND
PREMIUMS
14.10.1The Fifth Schedule to the principal Act is amended in paragraph (1)(4)(i) by the deletion of the words “twenty thousand
Kwacha” and the substitution therefor of the words “one hundred thousand Kwacha”;
The sub-paragraph now reads as follows:
(4) Any building constructed or acquired by a person to provide housing for the purposes of that person’s business is an
industrial building for the purposes of this Part:
Provided that (i) the cost of each housing unit does not exceed one hundred thousand Kwacha (in this paragraph referred to as low
cost housing);
This amendment increases the allowable expenditure for the construction or acquisition of employee housing to K100,000
from K20,000.
Example 2: Allowable Expenditure Calculation
ACB Limited’s expenditure for building houses for two employees has been calculated to cost K60,000 each. The company
builds a house in 2022 for one of the employees, and later builds the second house in 2023 for the other. Below is the calculation
for the wear and tear allowance on the allowable expenditure in different charge years for the two houses:
Table 2: Wear and Tear Allowance on Allowable Expenditure
From the above example, it can be noted that in the charge year 2022, only K20,000 from the K60,000 expenditure is allowable
and subject to a wear and allowance at 10%. However, in 2023 the whole K60,000 amount is allowable because the maximum
allowable expenditure has been increased to a K100,000. Therefore, the 10% wear and tear allowance will be applied on the
whole K60,000.
14.10.2 The Fifth Schedule to the principal Act is amended in paragraph 10 by the insertion of the following new sub-paragraph
immediately after sub-paragraph (7);
(8) Despite the other provisions of this Act, a public private partnership project approved under the Public-Private Partnership
Act, 2009, may claim on a straight line basis, wear and tear at an accelerated rate, not exceeding one hundred percent in respect
of a new implement, plant or machinery acquired and used by the special purpose vehicle for the purpose of that public private
partnership project.
The amendment introduces a provision to elect for an accelerated rate of wear and tear allowance on a straight-line basis, not
exceeding 100%, in respect of any implement, plant and machinery acquired and used under a Public Private Partnership
project. This wear and tear allowance is granted in the year that the equipment is brought to use and can only be claimed upon
application.
Example 3: Claiming the Wear and Tear Allowance
Company X acquired machinery worth K4,000,000 for the construction of a bridge in a public private partnership project.
Following, the amendment of the law, the company is entitled to a 100% wear and tear allowance for the said expenditure.
Company X has an option to claim the whole K4,000,000 or to spread it equally for a period of years (straight-line basis). The
illustration is as shown in the tables below:
13
Table 3: Options 1 – Allowance Claimed at 100%
Option 1 shows a situation where a taxpayer elects to claim the wear and tear allowance at 100%. Whereas Option 2 illustrates
where a taxpayer elects to use the straight-line basis for claiming the allowance which in this case is at 50%. Meaning, in Year 1 a 2
million is claimed then in year 2 another 2 million is claimed, thus exhausting the claim fully in 2 years. Further, Option 3 shows
where a taxpayer claims normally at 25% for 4 years, before the amendment introduced the two other options above.
14.11 SIXTH SCHEDULE: FARM IMPROVEMENT AND WORKS, ALLOWANCES LIVESTOCK VALUATION
The Sixth Schedule to the principal Act is amended in paragraph (1) in the definition of “farm dwelling” by the deletion of the
words “twenty thousand Kwacha” and the substitution therefor of the words “one hundred thousand Kwacha”.
The paragraph now reads as follows:
“farm dwelling” means a permanent building, used as a dwelling (the original cost of which is taken for the purposes of this Part
as not in excess of one hundred thousand Kwacha), which is not used by the farmer claiming the allowance under this Part as the
homestead of himself and his family;
This amendment increases the farm improvement allowance to K100,000 from K20,000. The allowance is given at 100% of the
allowable expenditure for farming.
14.12 NINTH SCHEDULE: PRESUMPTIVE TAX
14.12.1 The Ninth Schedule to the principal Act is amended by the deletion of Part II and the substitution therefor of the following:
PART II
TAX ON TURNOVER
Turnover per annum K12,000 or less
Above K12,000 up to K800,000
14
Tax Rate
0 percent
4 percent
This amendment introduces a threshold on Turnover Tax of K12,000 per annum to be taxed at 0% and the balance at the
applicable Turnover Tax rate which is currently at 4%. This means that taxpayers with turnover of up to K1,000 per month,
will not pay turnover tax because their income will be taxed at 0%. However , they will be expected to file a monthly turnover
tax return to indicate how much turnover should be subject to 0%.
Suppose a taxpayer has an annual turnover of K600,000, table 6 below shows the tax payable prior 2023, and tax payable
effective 1st January 2023:
Table 6: Turnover Tax Computation for a charge year
The above table illustrates the tax payable for a taxpayer under the Old and new Turnover Tax regime. In 2022 the taxpayable
was K24,000 where as in 2023 the first K12,000 will be taxable at 0% and the balance will be taxed at 4%.
Further, table 7 below illustrates the tax payable for a taxpayer under the new Turnover Tax regime where in month 1 the sales
are less than the amount taxable at 0% and where in month 2 the sales exceed the amount taxable at 0%.
Table 7: Turnover Tax Computation per month
14.12.2 The Ninth Schedule to the principal Act is amended by the deletion of Part III and the substitution therefor of the following:
PART III
TAX ON BETTING AND GAMING
Type of Game
Monthly Tax Rate or Monthly Tax Amount
1. Online Casino Live Games
2. Online Casino Machine Games
3. Casino Games (Brick and Mortar)
4. Online Lottery Winnings
5. Lottery Winnings (Brick and Mortar)
6. Online Betting
7. Betting (Brick and Mortar)
8. Gaming Machines
20 percent of gross takings
35 percent of gross takings
K5,000 per table
35 percent of net proceeds
15 percent of net proceeds
25 percent of gross takings
15 percent of gross takings
K500 per machine
NOTES:
1.
“Net proceeds” means the gross proceeds less sums paid out for the prizes.
2.
“Gross takings” means the total amount staked by players less the winnings payable and redemptions by the players.
3.
The 15% tax rate on betting (Brick and Motor) is only applicable for the 2023 and 2024 charge years.
This amendment reduces the presumptive tax to 15% from 25% on land-based (brick and mortar) betting companies and to
15% from 35% on Lottery winnings (brick and mortar) for the 2023 and 2024 charge years.
14.12.3 The Ninth Schedule to the principal Act is amended by the insertion of the following new part immediately after Part III.
PART IV
PRESUMPTIVE TAX ON ARTISANAL AND SMALL SCALE MINING
Tax rate
4%
Tax base
gross turnover less mineral royalty paid
15
This amendment introduces a presumptive tax rate for income earned from artisanal and small-scale mining which is based
on the gross turnover less mineral royalty paid. Currently, all mining entities are subject to Corporate Income Tax irrespective
of the turnover. The K12,000 annual income threshold taxed at 0% which is applicable to the general turnover tax will not
apply to the artisanal and small-scale mining sector.
14.13 CHARGING SCHEDULE
14.13.1 The Charging Schedule to the principal Act is amended in paragraph 1 (1) (b) by the deletion of the words “six thousand
Kwacha” and the substitution therefor of the words “seven thousand two hundred Kwacha”;
The paragraph now reads as follows:
(1) Subject to subparagraph (2), the tax credit referred to in section 14 (2) which is appropriate is—
(a) zero for an individual for a charge year; and
(b) seven thousand two hundred Kwacha per annum for a person with a disability
registered by the Zambia Agency for Persons with Disabilities.;
This amendment increases the tax credit for persons with disabilities to K7,200 per annum (K600
per month) from K6,000 per annum (K500 per month).
To access the tax credit:
(i)
in the case of full time employees, their employers will grant the credit through the payroll.
(ii)
for self employed individuals it will be through their Income Tax return which should be submitted after 31st December
every year.
Note:
- In order to qualify for the tax credit, the individual should be a member of the Zambia Agency for Persons with Disabilities.
- The granting of the tax credit shall not give rise to the repayment of tax.
14.13.2 PAY AS YOU EARN – PARAGRAPH 2(1)(c)(d)(e) and (f)
The amendment increases the annual income band taxable at zero percent for individuals (those in employment and selfemployed) to K57,600 from K54,000. This means that an individual who earns up to K4,800 per month or up to K57,600 per
annum shall not pay income tax.
The amendment further reduces the rate of tax applicable to individuals to 20% from 25% on the balance of an individual’s
income per annum that exceeds K57,600 but does not exceed K81,600.
The income bands have been adjusted as shown in the Tables below:
Table 8: Comparison of Personal Income Tax Bands – Annual
16
Table 9: Comparison of Personal Income Tax Bands – Monthly
The change in bands is further illustrated below:
Table 10: Tax Bands
14.13.3 The Charging Schedule to the principal Act is amended in paragraph 3 (1) by the deletion of item (c) and the substitution
therefor of the following:
(c) on the income of electronic communications network or service licensee at the rate of thirty-five per centum per annum;
This amendment introduces a single tax rate of 35% for the telecommunication sector. Prior to this amendment, there was a
two tier taxation system in which the first K250,000 was taxed at 30% and the excess at 40%.
Example 4: Income Tax Computation for a Telecommunications Company
In the 2022 charge year ABC Telecoms Limited records a taxable profit of K1,000,000. The tax payable is as follows:
The first K250,000 @ 30%: K75,000
Balance K750,000 @ 40%: K300,000
Total tax payable:
K375,000
In the 2023 charge year ABC Telecoms Limited records the same taxable profit of K1,000,000. The tax payable is as follows:
K1,000,000 @ 35% = K350,000
14.13.4 The Charging Schedule to the principal Act is amended in paragraph 3 (1) by the deletion of item (d);
This amendment removes the requirement to charge tax at the rate of 40% on income exceeding K250,000 for telecomunication
companies.
14.13.5 The Charging Schedule to the principal Act is amended in paragraph 3 (1) by the renumbering of item (e) as (d)
The amendment renumbers item (e) as (d) following the deletion of item (d) which placed a requirement to charge tax at the
rate of 40% on income exceeding K250,000 for telecomunication companies.
14.13.6 The Charging Schedule to the principal Act is amended in paragraph 5 by the deletion of item (e) and the substitution
therefor of the following:
(e) the maximum rate of tax for turnover received by a person or partnership from the letting of property shall bei.
zero percent per annum on turnover as does not exceed twelve thousand Kwacha;
17
ii.
iii.
four percent per annum on turnover between twelve thousand and eight hundred thousand Kwacha; and
twelve and a half percent per annum on turnover as exceeds eight hundred thousand Kwacha.
The amendment introduces graduated bands on rental income received from the letting of property. This means that a 0% tax
rate will apply on the first K12,000 per annum and 4% will apply on rental income above K12,000 but not exceeding K800,000
per annum. Further the tax rate for rental income in excess of K800,000 per annum shall be at 12.5%.
Example 5: Rental Income Tax Computation
Below are the computations to show the tax payable on rental income for the charge years2022 and 2023:
Table 11: Rental Income of K800,000 or below
As can be noted from the tables above, in 2022 rental income of K600,000 (income not exceeding K800,000), was taxed at 4%.
However, effective 1st January 2023 the same K600,000 rental income is taxed differently i.e the first K12,000 is taxed at 0%
and the balance of K588,000 will be taxed at 4%.
Table 12: Rental Income above K800,000 per annum
In table 12 above, Rental income of K1,000,000 was taxed at the rate of 12.5% in 2022. Whereas in 2023 rental income of
K1,000,000 is subjected to three tax bands as shown above. Meaning that the first 12,000 is taxed at 0%, then K788,000 is taxed
at 4% and the balance of K200,000 is taxed at 12.5%.
14.13.7The Charging Schedule to the principal Act is amended in paragraph 5 by the insertion of the following new items immediately
after item (i):
(j) the maximum rate of tax charged on the income earned by an agro-processing business approved by the Zambia Development
Agency and carrying on manufacturing and processing of corn starch in a multi-facility economic zone or an industrial park,
shall be -
18
(i) zero percent for the 2023 to 2032 charge years;
(ii) fifty percent of the standard income tax rate for the 2033 to 2035 charge years; and
(iii) seventy-five percent of the standard income tax rate for the 2036 to 2037 charge years.
This amendment introduces income tax concessions on income generated from sales of corn starch by agro-processing
businesses operating in a Multi-Facility Economic Zone or Industrial Park.
For a company to qualify, the following conditions must be met:
(i)
The company must be approved as an agro-processing business by Zambia Development Agency; and
(ii)
The company must be carrying on manufacturing and processing of corn starch a in a multi-facility economic zone or
an industrial park.
Note:
For the purpose of this amendment manufacturing and processing of corn starch a in a multi-facility economic zone or an
industrial park will be agro-processing as defined by the ZDA Act.
14.13.8 The Charging Schedule to the principal Act is amended in paragraph 5 by the insertion of the following new item immediately
after item (j):
(k) the maximum rate of tax charged on the income earned from value addition to gemstones through lapidary and jewellery
facilities is twenty-five percent.
This amendment reduces the Corporate Income Tax rate to 25% from 30% on income earned from processing gemstones
through lapidary and jewellery facilities within the Republic.
This incentive is applicable to taxpayers that have the facilities to engrave, cut, polish and process the gemstones into jewellery,
and not just the seller of the gemstone that merely engages the lapidary service provider. However, in an instance where the
seller of the gemstone owns the facilities for the said value addition processes, they qualify for the incentive.
14.13.9 The Charging Schedule to the principal Act is amended in paragraph 5 by the insertion of the following new item immediately
after item (k):
(l) the tax chargeable on the income received by a special purpose vehicle undertaking a public private partnership project
under the Public Private Partnership Act, 2009 for the first five years that a public private partnership project makes profit
shall be fifteen percent;
This amendment prescribes a 15% tax rate for the first five years that a special purpose vehicle makes a taxable profit from a
project under a Public Private Partnership.
14.13.10 The Charging Schedule to the principal Act is amended in paragraph 6 by the insertion of the following new item immediately
after item (e):
(f) the rate of zero percent per annum for dividends paid by agro-processing business approved by the Zambia Development
Agency and carrying on manufacturing of corn starch in a multi-facility economic zone or an industrial park for the 2023
to 2032 charge years.
This amendment introduces a 0% tax rate on dividends payable by an agro-processing business that has been approved by the
Zambia Development Agency and carrying on manufacturing of corn starch in a multi-facility economic zone or an industrial
park. The incentive shall apply for the 2023 to 2032 charge years.
14.13.11 The Charging Schedule to the principal Act is amended in paragraph 7 by the deletion of
item (viii) and substitution therefor of the following:
(viii) tax required to be deducted from the payment of winnings from gaming, lotteries and betting shall be at the rate of twenty
percent, except that the applicable rate for the 2023 and 2024 charge years shall be fifteen percent.
The amendment reduces the tax rate to 15% from 20% on winnings from gaming and betting for the 2023 and 2024 charge
years.
14.13.12 The Charging Schedule to the principal Act is amended in paragraph 7 by the deletion of item (x) and substitution therefor
of the following:
(x) tax required to be deducted from a payment of interest under section 82A arising from interest earnings by an individual
with a savings group, shall be deducted at the rate of zero percent per annum;
19
This amendment reduces the withholding tax rate to 0% from 15% on interest earned by individuals from loans advanced to
members under the savings groups such as co-operatives and village banking.
14.13.13 The Charging Schedule to the principal Act is amended in paragraph 7 by the insertion of the following new item immediately
after item (x):
(xi) tax required to be deducted from a payment of interest under Section 82A arising from green bonds listed on a securities
exchange in the Republic with maturity of at least three years shall be at the rate of zero percent per annum;
The amendment introduces a withholding tax rate of 0% on interest income earned from green bonds listed on a securities
exchange in Zambia with maturity of at least 3 years.
Note:
Green bonds are long term instruments issued to provide funds to be spent solely on green projects that positively impact the
environment (eco-friendly).
14.13.14 The Charging Schedule to the principal Act is amended in paragraph 7 by the insertion of the following new item immediately
after item (xi):
(xii) tax required to be deducted from the payment of interest to individual life insurance policy holders shall be at the rate of
zero percent.
This amendment reduces the withholding tax rate to 0% from 15% on interest earned by an individual from a Life Insurance
policy.
20
15.0
THE INCOME TAX (TRANSFER PRICING) (AMENDMENT) REGULATIONS, STATUTORY INSTRUMENT NO. 89
OF 2022
15.1
REGULATION 1: TITLE AND COMMENCEMENT
These Regulations come into operation on 1st January, 2023.
15.2
REGULATION 22A: SUBMISSION OF COUNTRY BY COUNTRY REPORT
15.2.1 The Principal Regulation is amended by the deletion of sub regulation (2) and the substitution therefor of the following:
(2) An ultimate parent entity of a multi-national enterprise group that is resident for tax purposes in the Republic with
an annual consolidated group revenue exceeding four thousand, seven hundred and ninety-five million Kwacha in the
immediately preceding accounting year shall file a country-by-country report with the Commissioner General with respect
to its reporting accounting year on or before the date specified in subregulation (10).
This amendment provides for the use of a single currency for the threshold for Country-by-Country reporting as per the
OECD guidance. Previously, the Regulation provided for two currencies at EUR 750 million or K 4.795 billion. The K 4.795
billion is the Zambian Kwacha equivalent of EUR 750 million as at January 2015 which was K6.393 per Euro at the time.
15.2.2 The Principal Regulation is amended in sub regulation (7) by the deletion of paragraph (c) and the substitution therefor of the
following:
(c) the State of tax residence of the surrogate parent entity has not notified the Commissioner General of a systemic failure.
This amendment provides that an entity resident in Zambia that is not an ultimate parent entity or surrogate parent entity is
required to file a country-by-country report where the state of tax residence of the surrogate parent entity has not notified the
Commissioner-General of a systemic failure.
16.0
INCOME TAX (LOCAL CONTENT ALLOWANCE) REGULATIONS, STATUTORY INSTRUMENT NO. 82 OF 2022
16.1
REGULATION 1: TITLE AND COMMENCEMENT
These Regulations come into operation on 1st January 2023.
16.2
REGULATION 2: LOCAL CONTENT ALLOWANCE FOR AGRICULTURAL PRODUCTS
The Schedule to the Principal Regulations is amended by the insertion of the following new items immediately after 3:
4. Tomato
The amendment includes tomato to the schedule listing the agricultural products that are allowed for the local content
allowance.
21
17.0
17.1
PROPERTY TRANSFER TAX (AMENDMENT) ACT NO. 27 OF 2022
SECTION 1: TITLE AND COMMENCEMENT
This Act comes into operation on 1st January, 2023.
17.2
SECTION 2: INTERPRETATION
17.2.1 The Principal Act is amended by the deletion of “property” and the substitution therefor of the following definition:
“property” means—
(a)
a land in the Republic;
(b)
a share issued by a company incorporated in the Republic or by a company incorporated outside the Republic
where the company directly or indirectly owns at least ten percent of the shares in a company incorporated in the
Republic;
(c)
a mining right issued under the Mines and Minerals Development Act; 2015;
(d)
a mineral processing licence issued under the Mines and Minerals Development Act; 2015; and
(e)
intellectual property;
The amendment excludes an interest in a mining right and an interest in a mineral processing license from the definition of
property and incorporates it under the definition of share. .
17.2.2 The Principal Act is amended by the deletion of “share” and the substitution therefor of the following definition:
“share” includes a stock, certificate, warrant or equivalent rights, and an interest in a mining right or an interest in a mineral
processing licence;
The amendment includes an interest in a mining right and an interest in a mineral processing license in the definition of share.
This is to avoid taxing the transfer of a mining entity twice when there is a change of ownership.
17.2.3 Section 2 of the Principal Act is amended by the insertion of the following new definition in the appropriate place in
alphabetical order:
“Financial Service Provider” has the meaning assigned to the words in the Banking and Financial Services Act, 2017.
The Banking and Financial Services Act, 2017, defines a Financial Service Provider as “a bank, a financial institution or
financial business.”.
The amendment introduces the definition of a Financial Service Provider
17.3
SECTION 4: PROPERTY TRANSFER TAX
Section 4 of the principal Act is amended by the deletion of subsection (2) and the substitution therefor of the following:
(2) The rate of tax is (a) ten percent of the realised value in respect of a mining right for a mining licence;
(b) five percent of the realised value in respect of a mining right for an exploration licence;
(c) ten percent of the realised value in respect of a mineral processing licence;
(d) five percent of the realised value in respect of land;
(e) five percent of the realised value in respect of shares; and
(f) five percent of the realised value in respect of intellectual property.
This amendment reduces the property transfer tax rate on the transfer of mining rights held by exploration companies to 5%
from 10%.
17.4
SECTION 5: REALISED VALUE
17.4.1 Section 5 of the principal Act is amended by the deletion of subsection (2A) and the substitution therefor of the following:
(2A) Where the property to be valued is a share issued by a company incorporated outside the Republic that directly or
22
indirectly owns at least ten per cent of a company incorporated in the Republic, the realised value shall be whichever is
greater of the(a)
proportion that the value of the company incorporated in the Republic bears to the value of the company whose
shares are being transferred multiplied by the value of the transferred shares;
(b)
proportion that the value of the company incorporated in the Republic bears to the value of the company whose
shares are being transferred multiplied by the consideration for the transferred shares; and
(c)
proportion that the value of the company incorporated in the Republic bears to the value of the company whose
shares are being transferred multiplied by nominal value of the transferred shares.
This amendment clarifies that the realised value in respect of the computation of property
transfer tax on indirect transfer of shares is the proportion applicable to the value of the share for the Zambian company.
Example 6: Determination of Realised Value
A Zambian incorporated entity, Company C, is 30% directly owned by company B and indirectly owned by the parent
company A. Company A owns 90% shares of company B.
Additional information
The net asset value of Company A is K200m, while Company C’s net asset value is K5m. During the year shares with a nominal
value of K50m in Company A were transferred. The value of the shares being transferred as at 2023 is K80m and the shares
were sold at K60m.
Company A’s effective shareholding in Company C is: 90% x 30% = 27%
Since Company A indirectly owns at least 10% shares in company C (i.e 27% shareholding), the shares in Company A are
liable to tax in Zambia whenever its shares are transferred.
Note:
Formula is R = [ (X/Y) * Z] where;
R is the realized value.
X is the Net Asset value of Company C multiplied by the effective shareholding which is 1.35m.
Y Net asset value of Company A which is K200m.
Z The value of the transferred shares, nominal, consideration.
The proportion of the value of Company C to the value of company A is calculated as follows: 1.35m/200m = 0.00675.
Calculations
(i)
.Value: 0.00675 x K 80 m = K0.54m
(ii)
Consideration: 0.00675 x K60m = K0.405m
(iii)
Nominal value: 0.00675 x K50m = K0.3375m
23
The realized value is the greater of the following:
(i)
K0.54m
(ii)
K0.405m
(iii)
K0.3375m
The Realised Value on which property transfer tax will be charged in this case is K0.54m.
17.4.2 Section 5 of the principal Act is amended by the deletion of subsection (2B) and the substitution therefor of the following:
(2B) Despite subsection (2A), where the Commissioner-General is satisfied that a transfer is made for the purpose of group
reorganisation and that there is no change in the shareholding with respect to the company incorporated in the Republic,
the Commissioner-General may determine a nil value for that transfer except that this subsection shall only apply to a
company that has been part of the group of companies for three years or more preceding the transfer.
This amendment removes the reference to the effective shareholding when determining whether or not a transfer has a nil
realised value. Furthermore, the amendment restricts the exemption to situations where there is no change in the shareholding
17.4.3 Section 5 of the principal Act is amended by the deletion of subsection (2C).
This amendment deletes the definition of effective shareholding under the property transfer tax due to the clarification
provided on the computation of the realised value.
17.4.4 Section 5 of the principal Act is amended by the renumbering of subsections (2D) and (2E) as subsections (2C) and (2D),
respectively;
The amendment renumbers subsections (2D) and (2E) as subsections (2C) and (2D) following the deletion of subsection (2C)
which made reference to effective shareholding.
17.4.5 Section 5 of the principal Act is amended by the deletion of subsection (3) and the substitution therefor of the following:
(3) Where the property to be valued is an intellectual property or a mining right, the realised value of the intellectual
property or mining right shall be the actual price of the intellectual property or mining right or as determined by the
Commissioner- General, whichever is higher.;
The amendment removes reference to an interest in a mining right from subsection (3). The interest in the mining right will
now be taxed together with the transfer arising from the change in the shareholding.
17.4.6 Section 5 of the principal Act is amended by the insertion of the following new subsection immediately after subsection (5):
(5A) Where a financial service provider transfers a foreclosed property, the realised value of the property shall be the actual
price, if any, received by the financial service provider.
This amendment allows for the use of the actual price receivable in determining the realised value of the foreclosed property
disposed of by a financial service provider.
17.5
SECTION 6: EXEMPTIONS
Section 6 (1) of the principal Act is amended by the insertion of the following new paragraph immediately after paragraph (g):
(h) the surrender or forfeiture of shares for no consideration, except that a subsequent transfer to a different person shall be
liable to tax.
This amendment exempts the surrender or forfeiture of shares from property transfer tax where there is no consideration.
Further, it provides that where the surrendered or forfeited shares are transferred to a different person, PTT shall apply on
the transfer.
17.6
SECTION 9: RETURNS, NOTICES, ETC
17.6.1 Section 9 of the principal Act is amended in subsection (2)(b), by the deletion of subparagraph (i) and the substitution
therefor of the following:
i. in the case of land, to the Commissioner-General together with the consent to transfer or assign issued under the Lands Act;
This amendment removes the reference to Commissioner of Lands and prescibes that, in relation to land, the provisional
24
return shall be submitted to the Commissioner-General.
17.6.2 Section 9 of the principal Act is amended by the deletion of subsection (3).
This amendment deletes the provision that makes reference to Commissioner of Lands since returns are submitted to the
Commissioner-General.
17.6.3 Section 9 of the principal Act is amendment by the renumbering of subsections (4), (5), (6) and (7) as subsections (3), (4), (5)
and (6), respectively.
Following the deletion of subsection (3) which makes reference to the Commissioner of Lands, subsections (4), (5), (6) and
(7) have been renumbered as subsections (3), (4), (5) and (6), respectively
25
18.0
THE MINES AND MINERALS DEVELOPMENT AMENDMENT ACT NO. 29 OF 2023
18.1
SECTION 1: TITLE AND COMMENCEMENT
This Act comes into operation on 1st January, 2023.
18.2
SECTION 89: ROYALTIES ON PRODUCTION OF MINERALS
Section 89 of the principal Act is amended by the deletion of subsection (2) and the substitution therefor of the following:
(2) Where the base metal produced or recoverable under the licence is copper, the mineral royalty payable shall be
applied at an incremental value in each price range at the rate of —
(a) four percent of the norm value when the norm price of copper is less than four thousand United States dollars
per tonne;
(b) six point five percent of the norm value when the norm price of copper is four thousand United States dollars or
higher per tonne but less than five thousand United States dollars per tonne;
(c) eight point five percent of the norm value when the norm price of copper is five thousand United States dollars
or higher per tonne but less than seven thousand United States dollars per tonne; and
(d) ten percent of the norm value when the norm price of copper is seven thousand United States dollars or higher
per tonne.
This amendment restructures the Mineral Royalty regime for Copper to tax the incremental value in each price range when
the price crosses each Mineral Royalty price threshold.
Table 13 : Calculation of Mineral Royalty
Example 7: Mineral Royalty Computation
RDM Mines Ltd sells 100,000 tonnes of copper when the norm price of copper is $9,300 per tonne. The mineral royalty
calculation will be as shown in table 14 below:
26
Table 14: Mineral Royalty payable
In the previous regime, the mineral royalty payable was $93,000,000.00 while in the current regime it is $62,506,000.00 for the
same quantity of copper.
27
19.0
THE VALUE ADDED TAX (AMENDMENT) ACT NO. 26 OF 2022
19.1
SECTION 1: TITLE AND COMMENCEMENT
This Act comes into operation on 1st January, 2023.
19.2
SECTION 2: INTERPRETATION
Section 2 of the principal Act is amended by the deletion of the definition of “commercial property” and the substitution
therefor of the following:
“commercial property” means a building that is used for commercial purposes, or land designated or sold for commercial purposes,
and includes an office building, an industrial building, a health facility, hotel, shopping mall, retail store, shopping centre,
warehouse, garage, recreation centre, dwelling house used for commercial purposes and multi facility building.
The amendment extends the definition of a commercial property to include land designated or sold for commercial purposes.
Further, where a portion of land has a building constructed for commercial purposes and the rest is bare, the entire property
will be treated as commercial property for Value Added Tax purposes.
19.3
SECTION 7A: RECORD OF SALES
Section 7A of the principal Act is amended by the deletion of the marginal note and the substitution therefor of the following:
Record of sales.
This amendment aligns the section heading to the changes effected by Amendment Act number 44 of 2021 which replaced the
words “daily sales” with “each sale or transaction”.
19.4
SECTION 18: TAX DEDUCTIONS AND CREDIT
Section 18 of the principal Act is amended by the deletion of subsection (4) and the substitution therefor of the following:
(4) Input tax shall not be deducted or credited after a period of ninety days from the date of the relevant tax invoice or other
evidence referred to in subsection (3) to the date of submitting the return, except in circumstances as the CommissionerGeneral may by rule, specify.
This amendment clarifies that the validity period of a tax invoice or other documentary evidence used to claim input tax is
within ninety days from the date of the said documents to the date of submitting the return.
Example 8: Input Tax Claim Period
If the taxpayer’s invoice is dated 8th January 2023, table 15 illustrates the periods in which this invoice is eligible for claiming
input tax.
Table 15: Invoice Validity
Note:
Where the taxpayer in the example above, submits a return by the 7th of April, the invoice will be
tax claimed after the 7th of April will not be claimable because it has exceeded.
the 90 days.
valid. However, input
Where a return is submitted on time but includes invoices that are more than 90 days from the date of the invoice to the
date of submitting that return, input tax relating to those invoices is not deductible.
Where a return is submitted late but includes invoices that are within 90 days from the date of the invoice to the date of
submitting that return, input tax relating to those invoices is deductible.
28
19.5
SECTION 44: EVASION OF TAX
Section 44 (1) of the principal Act is amended by the deletion of the words “thirty thousand penalty units” and the substitution
therefor of the words “three hundred thousand penalty units”.
This amendment increases the penalty under section 44(1) to K90,000 from K9,000. This is to align the penalty under section
44(1) with that under section 44 (2) to ensure that the same penalty is applicable under the section.
29
20.0
THE VALUE ADDED TAX (EXEMPTION) (AMENDMENT) ORDER STATUTORY INSTRUMENT NO. 87 OF 2022
20.1
TITLE AND COMMENCEMENT
This Order comes into operation on 1st January 2023.
20.2
PARAGRAPH 2: INTERPRETATION
20.2.1 Paragraph 2 of the principal Order is amended by the deletion of the definition of “poultry” and the substitution therefor of
the following:
“Poultry” means a chicken, duck, goose, turkey, quail and guinea fowl.
This amendment extends the definition of poultry to include quails and guinea fowls. This means that the supply of quails and
guinea fowls including the feed for these birds is exempt from VAT.
20.2.2 Paragraph 2 of the principal Order is amended by the insertion of the following definition in the appropriate place in
alphabetical order:
“project” has the meaning assigned to the word in the Public-Private Partnership Act, 2009.
This amendment introduces the definition of “project” as provided in the Public Private Partnership Act, 2009.
The Public Private Partnership Act, 2009, defines “project” as “an infrastructure project, an infrastructure facility, or the
provision of any social sector service, as the case may be”.
20.2.3 Paragraph 2 of the principal Order is amended by the insertion of the following definition in the appropriate place in
alphabetical order:
“public-private partnership” has the meaning assigned to it in the Public-Private Partnership Act, 2009.
This amendment introduces the definition of public-private partnership as provided in the Public-Private Partnership Act,
2009.
The Public-Private Partnership Act, 2009, defines a public-private partnership as “investment through private sector
participation in an infrastructure project or infrastructure facility”.
20.3
ITEM 1: BETTING, GAMING AND LOTTERIES
The schedule to the principal Order is amended by the deletion of item 1 and substitution therefor of the following:
1. Betting, Gaming and Lotteries services.
This amendment introduces Betting, Gaming and Lottery services in the Exemption Order. Therefore, Betting, Gaming and
Lottery services are exempt from VAT.
20.4
ITEM 10: RELIEF AT IMPORTATION
The Schedule to the principal Order is amended in item 10, by the insertion of the following new paragraph immediately after
paragraph (d):
(e) Machinery and equipment imported for use under a public-private partnership project where duty shall be waived under the
Customs and Excise (General) Regulations, 2000, subject to the same limitations and conditions as may be specified therein.
This amendment includes machinery and equipment imported for use under a public-private partnership project to the
list of exempt items, provided customs duty on those items is waived in accordance with the Customs and Excise (General)
Regulations, 2000.
20.5
ITEM 16: FOOD AND AGRICULTURE
The Schedule to the principal Order is amended in item 16, by the insertion of the following new paragraph immediately after
paragraph (g):
(h) Pure bred breeding animals (game animals) being imported of HS code 0101.21.00
This amendment exempts from VAT, horses that are imported as breeding stock.
30
21.0
THE VALUE ADDED TAX (ZERO-RATING) (AMENDMENT) ORDER STATUTORY INSTRUMENT NO. 86 OF 2022
21.1
TITLE AND COMMENCEMENT
This Order comes into operation on 1st January, 2023.
21.2
PARAGRAPH 2: INTERPRETATION
Paragraph 2 of the principal Order is amended by insertion of the following definition in the appropriate place:
“special purpose vehicle” has the meaning assigned to the word in the Income Tax Act.
This amendment introduces the definition of “special purpose vehicle” as provided in the Income Tax Act.
The Income Tax Act, defines a special purpose vehicle as “a company incorporated in the Republic by a successful bidder for
the purpose of undertaking a public private partnership project in accordance with the Public Private Partnership Act, 2009”.
21.3
GROUP 2: SUPPLIES TO PRIVILEGED PERSONS
The First Schedule to the principal Order is amended in Group 2, by the deletion of paragraph (a) and the substitution
therefore of the following:
(a)
the goods and services supplied to, or imported by, a special purpose vehicle during the construction period.
This amendment zero-rates goods and services supplied to a special purpose vehicle during the construction period.
Further, the amendment excludes from the Zero-rating Order, goods imported by the President. This means that (standard
rated) goods imported by the President are now liable to Value Added Tax at 16%.
21.4
GROUP 4: MOSQUITO NETS
The First Schedule to the principal Order is amended by the deletion of Group 4 and the substitution therefor of the following:
The following raw materials, when purchased by manufacturers of mosquito nets:
(a)
(b)
(c)
polyester textured yarn: HS Code 5402.33.00;
textile dyestuff; HS Code 3204.11.00; and
long lasting insecticide treated curtains.
This amendment limits the zero-rating of raw materials under Group 4 to manufacturers of mosquito nets. This means that if
these raw materials are purchased by a non-manufacturer of mosquito nets, the raw materials shall be standard rated.
21.5
GROUP 7: ENERGY SAVING APPLIANCES, MACHINERY AND EQUIPMENT
21.5.1 he First Schedule to the principal Order is amended in Group 7, by the deletion of paragraph (h) and substitution therefor of
the following:
(h) Electric accumulators solar batteries i.
ii.
iii.
iv.
v.
vi.
lead acid of a kind used for starting piston engines;
other lead acid accumulators;
nickel cadmium;
nickel iron;
Lithium ion; and
other accumulators.
This amendment clarifies that only solar batteries are zero-rated.
Further, the amendment extends the zero-rating to Lithium ion batteries for use with solar equipment.
21.5.2 The First Schedule to the principal Order is amended in Group 7, by the deletion of paragraphs (j) and (l) and the renumbering
of paragraph (k) as paragraph (j).
The amendment deletes paragraph (j) and (l), and renumbers paragraph (k) as paragraph (j). This means that the following
31
items are standard rated:
(j) electric generating sets (diesel or semi diesel generators; and generators with spark ignition internal combustion piston
engines); and
(l) stoves, ranges, grates, cookers (including those with subsidiary boilers for central heating), barbecues, braziers, gas rings,
plate warmers and similar non electric domestic appliances, and parts thereof, of iron or steel for cooking and plate
warmers that use gas fuel or for both gas and other fuels.
21.6
GROUP 8: EQUIPMENT AND MACHINERY
The First Schedule to the principal Order is amended by the deletion of Group 8 and the substitution therefor of the following:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)
(m)
(n)
(o)
(p)
(q)
(r)
Windmills;
hammer mills of HS code 8436.10.00;
maize dehullers;
two-wheel tractors, including ploughs, harrows, disc harrows, planters, seeders, rippers or sub-soilers, and
cultivators of such tractors;
tractors of HS codes 8701.91.10, 8701.92.10, 8701.93.10, 8701.94.10, 8701.95.10, including ploughs, harrows, disc
harrows, planters, seeders, rippers or sub-soilers and cultivators of such tractors;
pumps of HS codes 8413.20.00, 8413.50.00, 8413.60.00, 8413.70.00 and 8413.81.00;
sprayers;
manure spreaders;
balers;
combine harvesters;
irrigation systems;
animal feed grinder or mixer;
pelleting machine;
dryers for agricultural products of HS code 8419.31.00;
trailers of HS code 8716.20.00;
milk cans and churns of Hs codes 7310.10.10,7310.21.10, and 7310.29.10;
milking machines of Hs codes 8434.10.00 and 8434.20.00; and
principal on leasing finance for agricultural equipment and machinery listed in paragraphs (a) to (q).
This amendment extends zero-rating to milk cans, churns and milking machines.
21.7
GROUP 12: INFORMATION AND COMMUNICATION TECHNOLOGY EQUIPMENT
The First Schedule to the principal Order is amended by the insertion of the following new Group immediately after Group
11:
(a)
optical fibre cables of HS code 8544.70.00;
(b)
connectors for optical fibres, optical fibre bundles or cables of HS code 8536.70.00;
(c)
other devices, appliances and instruments of HS code 9013.80.00; and
(d)
other optical instruments and appliances of HS code 9031.49.00.
This amendment extends the Zero-Rating Order by the addition of a new group of selected Information and Communication
Technology items.
32
22.0
THE VALUE ADDED TAX (GENERAL) (AMENDMENT) REGULATIONS, 2022 STATUTORY INSTRUMENT NO. 91
OF 2022
22.1
TITLE AND COMMENCEMENT
These Regulations come into operation on 1st January, 2023.
22.2
REGULATION 2: INTERPRETATION
Regulation 2 of the principal Regulations is amended by the insertion, in the appropriate place, of the following:
“Zambia Tourism Agency” means the Zambia Tourism Agency established under the Tourism and Hospitality Act, 2015.
This amendment introduces the definition of the Zambia Tourism Agency as established in the Tourism and Hospitality Act,
2015.
22.3
REGULATION 13: TAX PAID PRIOR TO REGISTRATION
The principal Regulations are amended by the revocation of regulation 13 and the substitution therefor of the following:
13 (1) An intending trader may claim input tax credit or deduction in respect of goods or services that are received within
a period of(a) four years from the date of registration as an intending trader(i) for electricity generation;
(ii) for farming;
(iii) for mining; or
(iv) or tourism, where the intending trader is engaged in the development of a tourism facility or tourism
infrastructure, and is registered and licensed by the Zambia Tourism Agency;
(b) ten years from the date of registration as an intending trader for mining, petroleum or gas exploration; and
(c) two years from the date of registration as an intending trader for any other trading activities.
(2) The input tax claimed under subregulation (1) shall relate to the business activity as approved by the CommissionerGeneral at registration and shall not apply after the specified periods have elapsed.
(3) Despite subregulation (2), the input tax claimed under subregulation (1) shall apply after the specified periods under
subregulation (1) if the trading activities have commenced and the intending trader is making taxable supplies.
(4) An intending trader, whether an individual or a corporate body, to whom this regulation applies, shall retain
and produce records, invoices, accounts and any other information relating to the supply or importation, as the
Commissioner-General may require for the period prescribed under section 42(1) of the Act.
(5) A claim under this regulation shall be allowed only to the extent of, and subject to, the conditions prescribed under
section 18 of the Act, in relation to input tax generally.
(6) Despite subregulation (4), where the intending trader is not in possession of documentary evidence as required under
section 18(3) of the Act, the claim shall be
(a) disallowed; or
(b) partly disallowed by rules of apportionment provided under section 18 of the Act and applying to the intending
trader’s business.
(7) Despite the requirements provided under the Rules issued by the Commissioner-General by Gazette Notice in respect
of cash accounting principles, a cash basis of accounting shall be granted, on registration for tax, to intending traders
referred to in subregulation (1).
(8) In this regulation, “intending trader” means a supplier who is registered in anticipation of commencing trading
activities.
The amendment specifies the qualifying categories under exploration as mining exploration, petroleum exploration and gas
exploration.
33
23.0
THE VALUE ADDED TAX (ELECTRONIC FISCAL DEVICE) (AMENDMENT) REGULATIONS, 2022 STATUTORY
INSTRUMENT NO. 88 OF 2022
23.1
TITLE AND COMMENCEMENT
These Regulations come into operation on 1st January, 2023.
23.2
REGULATION 2: INTERPRETATION
Regulation 2 of the principal Regulations is amended by the insertion of the following definition in the appropriate place:
“inspection log book” means a record in a physical or an electronic format.
This amendment introduces a definition of an inspection log book. An inspection log book is a book that is used to record the
following information relating to an Electronic Fiscal Device (EFD) or a Virtual Electronic Fiscal Device:
(i)
(ii)
(iii)
23.3
description and time that a fault occurs;
the time that the fault is reported to the Commissioner-General; and
any other information relating to the EFD or Virtual EFD.
REGULATION 7: USE OF ACCOUNTING SOFTWARE
The principal Regulations are amended by the revocation of regulation 7 and the substitution therefor of the following:
7. A taxable supplier may use an accounting software to issue a tax invoice if that accounting
software is integrated with the tax invoice management system.
This amendment provides for the use of an accounting software that is integrated with the tax invoice management system for
the issuance of a tax invoice.
23.4
REGULATION 11: INSPECTION LOG BOOKS
The principal Regulations are amended by the revocation of regulation 11 and the substitution therefor of the following:
11. (1) A taxable supplier whose accounting software, electronic fiscal device or virtual electronic fiscal device is connected
to the tax invoice management system, shall keep and maintain an inspection log book.
(2) An inspection log book shall be maintained for each electronic fiscal device or virtual electronic fiscal device.
The amendment provides a requirement for taxpayers to maintain log books in electronic or physical form.
34
24.0
THE CUSTOMS AND EXCISE (AMENDMENT) ACT NO. 25 OF 2022
24.1
SECTION 1: TITLE AND COMMENCEMENT
This Act comes into operation on 1st January, 2023.
Despite the date of commencement of this (Amendment) Act being 1st January 2023, Section 188A (Electronic Fiscal Device)
shall come into operation on a date appointed by the Minister by statutory instrument.
24.2
SECTION 2: INTERPRETATIONS
24.2.1 Section 2 of the principal Act is amended by the deletion of the definitions of “manufacture” and “manufacturer” and the
substitution therefor of the following:
“manufacture” in relation to goods liable to excise duty or surtax, other than imported goods, includes the mixing,
brewing, distilling, packaging, extraction, production or refining of goods liable to excise duty or
surtax; and
“manufacturer in relation to goods liable to excise duty or surtax, other than imported goods” includes any person who
is required to be licensed in terms of section 93 and any person who mixes, brews, distils, packages, extracts,
produces or refines goods liable to excise duty or surtax or who employs others to do so on account of such
person and “licensed manufacturer” and cognate expressions shall be construed accordingly.
This amendment broadens the definition of manufacture and manufacturer to provide for extracted goods.
24.2.2 Section 2 of the principal Act is amended by the insertion of the following new definition in the appropriate place in
alphabetical order:
“electronic fiscal device” has the meaning assigned to the words in the Value Added Tax Act.
This amendment introduces the definition of an electronic fiscal device.
24.3
SECTION 93: LICENCE TO MANUFACTURE GOODS LIABLE TO EXCISE DUTY OR SURTAX
24.3.1 Section 93 of the principal Act is amended by the insertion of the following new subsection immediately after subsection (1):
(2) Despite subsection (1), the Minister may, by statutory instrument, prescribe the goods that may be exempt from the
requirement of obtaining a licence.
This amendment provides for the Minister responsible for Finance to prescribe goods that may be exempted from the
requirement to obtain a manufacturing licence.
24.3.2 Section 93 of the principal Act is amended by renumbering of subsections (2) and (3) as subsections (3) and (4), respectively.
The amendment rearranges subsections (2) and (3) as subsections (3) and (4), following the insertion of a new subsection (2).
24.4
SECTION 151: MISCELLANEOUS OFFENCES
Section 151 of the principal Act is amended by the insertion of the following new paragraph immediately after paragraph (l):
(m) fraudulently charges excise duty or surtax on goods or services contrary to the provisions of this Act.
This amendment makes it an offence to charge excise duty or surtax contrary to the provisions of the Customs and Excise Act.
24.5
SECTION 188A: USE OF ELECTRONIC FISCAL DEVICE BY LICENSEE AND SERVICE PROVIDER
The principal Act is amended by the insertion of the following new section immediately after section 188:
188A. (1) A licensee and service provider shall use an electronic fiscal device to record each sale or transaction relating
to goods and services liable to excise duty.
(2) Despite subsection (1), the Commissioner-General may approve the use of a document, device or equipment, other
than an electronic fiscal device, for a certain category of licensees or service providers.
35
(3) A licensee or service provider shall issue a tax invoice using an electronic fiscal device for the sale of goods or services
rendered.
(4) Despite subsection (3), the Commissioner-General may approve the issuance of a tax invoice using an approved computer
application or preprinted tax invoice by a licensee or service provider.
(5) A licensee or service provider that contravenes this section commits an offence and is liable, on conviction, in the case of a—
(a) first offence, to a penalty not exceeding one hundred thousand penalty units;
(b) second offence, to a penalty not exceeding two hundred thousand penalty units; and
(c) third or subsequent offence, to a penalty not exceeding three hundred thousand penalty units, or to imprisonment for
a term not exceeding three years, or to both.
The amendment provides for:
i.
The requirement for a licensee and a service provider to use an Electronic Fiscal Device (EFD) to record each sale or
transaction relating to goods and services liable to excise duty;
ii.
The Commissioner-General to approve the use of a document, device or equipment, for a certain category of licensees
or service providers as alternatives to the use of an EFD;
iii. A licensee or service provider to issue a tax invoice using an electronic fiscal device for the sale of goods or services;
24.6
iv.
The Commissioner-General to approve the issuance of a tax invoice using an approved computer application or
preprinted tax invoice by a licensee or service provider; and
v.
Penalties for non-compliance.
SECTION 198: REGULATIONS
Section 198(2) of the principal Act is amended by the insertion of the following paragraph immediately after paragraph (i):
(j) the supply and use of electronic fiscal device or other equipment in recording of sales and services.
The amendment provides that the Minister may issue regulations to prescribe the conditions for the supply and use of EFD
or other equipment.
24.7
SECOND SCHEDULE: EXCISE TARIFF
24.7.1 The Second Schedule is amended in heading 6(2), in the duty rate column opposite subheading 2207.20.10, by the deletion of
the figure “125%” and the substitution therefor of the figure “60%”.
This amendment reduces the excise duty rate on methylated spirit to 60% per litre from 125% per litre.
24.7.2 The Second Schedule is amended in heading 7, in the duty rate column opposite heading 24.01, by the deletion of the figure
“K355” and the substitution therefor of the figure “K361”.
This amendment increases the specific excise duty rates on unmanufactured tobacco and tobacco refuse to K361 per kg from
K355 per kg.
24.7.3 The Second Schedule is amended in heading 7, in the duty rate column opposite heading 24.02, by the deletion of the figure
“K355” and the substitution therefor of the figure “K361”.
This amendment increases the specific excise duty rates on Cigars, cheroots, cigarillos and cigarettes, of tobacco or tobacco
substitutes to K361 per mille from K355 per mille.
24.7.4 The Second Schedule is amended in heading 7, in the duty rate column opposite subheadings 2403.11.00, 2403.19.10,
2403.19.90, 2403.91.00 and 2403.99.00, by the deletion of the figure “K355” and the substitution therefor of the figure “K361”.
This amendment increases the specific excise duty rates on water pipe tobacco, cutrag, other manufactured tobacco,
manufactured tobacco substitutes, homogenised or reconstituted tobacco and others not specified to K361 per kg from K355
per kg.
36
24.7.5 The Second Schedule is amended by the(i)
deletion and replacement of heading 12; and
(ii)
insertion of a new heading (13) immediately after heading 12 as follows:
Table 16: Excise Duty on various articles of plastic, electronic cigarettes and similar personal electric vaporising devices
The amendment introduces excise duty on various articles of plastic at the rate of 15%.
Further, the amendment introduces excise duty on electronic cigarettes and similar personal electric vaporising devices at the
rate of 145%.
37
24.7.6 The Second Schedule is amended by renumbering of headings 13 and 14 as headings 14 and 15, respectively.
The amendment rearranges headings (13) and (14) as headings (14) and (15) following the insertion of a new heading 13.
24.8
SEVENTH SCHEDULE:
The Seventh Schedule to the principal Act is amended by the deletion of paragraph 2 and the substitution therefor of the
following:
2. For the purpose of paragraph 1(a) the value of air time which is disposed of free of charge shall be deemed to be the value that would have been
applicable if the airtime had been sold to the final consumer in ordinary course of business; and
(b) “price” means the aggregate of all amounts paid or payable by the buyer to, or for, the benefit of the seller in respect
of the services.
The amendment clarifies that the price to be used when determining the value for duty purposes (VDP) on air time is the full
price paid or payable by the consumer of the service.
Example 9
An internet service provider (ISP) provides internet services to its customer through a fibre network and its customers are
charged K 116,000 for the service. The charged price is the composition of the following:
Table 17
The price that will be used to determine the value for duty purposes will be K116,000.00.
38
25.0
THE CUSTOMS AND EXCISE (MANUFACTURING LICENCE) (EXEMPTION) REGULATIONS, STATUTORY
INSTRUMENT NO. 97 OF 2022
25.1
REGULATION 1: TITLE AND COMMENCEMENT
These Regulations come into operation on 1st January, 2023.
25.2
REGULATION 2: EXEMPTION FROM OBTAINING LICENCE AS MANUFACTURER
The regulation specifies goods for which a licenced manufacturer is not required to obtain a licence.
These goods are indicated in the table below:
Table 18: Goods for which a Licenced Manufacturer is not Required
39
PART III: OTHER MATTERS
26.0
TAX TREATMENT OF EMPLOYMENT BENEFITS
Any payments made by the employer for the benefit of employees that cannot be converted into money or money’s worth is
non-deductible in the hands of the employer in accordance with section 44 (l). The tax treatment of employment benefit will
depend on whether it is convertible into money or money’s worth. If it is capable of being converted into money or money’s
worth it is subject to tax under PAYE whereas, if it is not convertible (not translated into actual money) then it will be nondeductible on the employer subject to section 44(l).
“Money or money’s worth” is any expenditure that is of direct monetary value to a person and may relate to money, security,
tangible property, intangible property, or services that can be reduced to money’s value. Therefore, the monetary value may be
applied whether or not it is convertible into money or money’s worth.
Factors to consider for benefits that cannot be converted into money or money’s worth are dealt with under (iii).
(i)
Payment of employees’ bills (benefits convertible into money’s worth)
Where an employer discharges the liability of an employee by paying his or her private bills or expenses such as electricity,
phone or water bills, rent, school fees, school association fees, club membership fees and similar payments, the employer is
required to add such payments to the employee’s emoluments and deduct tax under Pay As You Earn (PAYE). Such expenses
will be an allowable deduction in the hands of the employer.
Rental of Accommodation Owned by the Employer
Where an employer pays a housing allowance to an employee and the employee in turn rents accommodation owned by that
employer, the employee’s allowance shall be subjected to PAYE while the payment of rent shall be liable to withholding tax.
NOTE:
It is expected that the rent charged reflects the economic value of accommodation based on the type of structure and the
location.
(ii) Benefits that cannot be converted into money or money’s worth
Benefits which cannot be converted into money or money’s worth are not taxable on employees. However, no deduction in
respect of the cost of providing the benefit may be claimed by the employer [section 44(l) of the Income Tax Act].
Non-money fringe benefits are those benefits or advantages that cannot be converted into money or money’s worth where any
three or more of the following factors apply:
• Not capable of being converted into actual money by the employee
• Not capable of being converted into a pecuniary benefit by the employee
• Not capable of disposal or transfer by the employee
• Not owned by the employee
• Received with restrictive terms and conditions
• One can use it or forfeit.
Examples:
Free Housing:
Where an employer provides free housing to an employee, an employee can only live in the house and is not allowed to lease
out. The employee cannot therefore convert the free housing benefit into cash or any other pecuniary benefit nor can they
transfer or dispose of the benefit or advantage of free housing.
Airtime:
Where an employer buys airtime for an employee with a condition that the airtime so credited to the employee, is for the sole
use of the employee, the benefit or advantage is not convertible into money or money’s worth as the employee cannot convert
the airtime into cash, or any other pecuniary benefit nor can the employee transfer or dispose of the airtime.
Free Fuel:
Where an employer provides fuel to an employee which may be bought through credit in a fuel card and the condition is that
the amount can only be used on a specific fuel type and in some cases also on a specific car, the benefit or advantage in this
case is not convertible into money or money’s worth because the employee cannot exchange the fuel for anything nor can the
fuel be transferred or disposed of.
40
(a)
In the case of residential accommodation provided to an employee by the employer in a house owned by that employer,
37.5% of the taxable income paid to the employee shall be disallowed in the employer’s tax computation, provided that
where an independent and objective valuation is made for such accommodation, the cost to be disallowed shall be
the value of that accommodation. For the purpose of verifying the rental value, the Commissioner-General may use
assessments done by the Government Valuation Department or other registered valuation surveyors.
Payments for utilities such as electricity, phone or water bills, security and similar payments are not included in the
meaning of free housing.
NOTE:
Where the employee pays a below-market rate (peppercorn rent) to the employer, the cost to be disallowed in the
employer’s tax computation is 37.5% of the total taxable emoluments paid to the employee.
(b) In the case of housing leased by the employer and provided to an employee:
(i) Where housing is occupied by a single employee, the amount of rentals will be added to the employee’s
emoluments and taxed under PAYE.
(ii) Where housing is occupied by more than one employee, the total amount of the rentals will be disallowed in
the employer’s tax computation.
(c) Taxation of Fringe Benefits
1) Provision of Services below market price.
Where the employer provides services to their employees below the open market value, the benefit or advantage that the
employee enjoys shall be treated as below:
- The difference between the open market value and the value at which the services are provided to the employee will
be disallowed in the hands of the employer
2) Provision of Goods below market price
Where the employer provides goods to their employees below the open market value, the benefit is convertible to money or
money’s worth and shall be treated as below:
-
The difference between the open market value and the value at which the goods are provided to the employee will be
taxable under PAYE. The employer may thus gross up and account for the tax accordingly.
(d)
In the case of the provision of motor vehicles to employees on a personal-to-holder basis, the benefit to be disallowed
in the employer’s tax computation is as follows:
Engine capacity of motor vehicle

2800cc and above - K48,000.00 per annum

1800cc and below 2800cc - K36,000.00 per annum

Below 1800cc – K21,600.00 per annum
A personal-to-holder vehicle means a vehicle provided to an employee for both business and personal use and usually involves
payment by the employer of all the expenses associated with the running and maintenance of the vehicle.
(iii)
Cash benefits paid in the form of allowances.
All cash benefits paid in the form of allowances are taxable on the employee under PAYE.
Examples of such cash benefits are:
Education allowance;
Housing allowance;
Transport/fuel allowance;
Domestic utility allowances e.g. for electricity, phone and water;
Commuted car allowance;
Settling in allowance;
Allowances paid in recognition of an employee’s professional qualifications etc.
41
26.1
PAYMENTS THAT ARE NOT SUBJECT TO PAY AS YOU EARN (PAYE)
The following payments are exempt (not chargeable to income tax) and need not be included in the taxable emoluments.
(i)
Ex-Gratia Payments:
A voluntary, non-contractual, non-obligatory payment made by an employer to the spouse, child or dependant of a
deceased employee is exempt (Paragraph 7(t) of the Second Schedule to the Income Tax Act).
(ii)
Medical Expenses:
Medical expenses paid or incurred by an employer on behalf of an employee or refunds of actual medical expenses
incurred by an employee are exempt (Statutory Instrument No. 104 of 1996).
(iii)
Funeral Expenses:
Funeral expenses paid or incurred by an employer on behalf of an employee are exempt (Statutory Instrument No. 104
of 1996).
(iv)
Sitting Allowances for Councillors:
Payments by Local Authorities to Councillors as Sitting Allowances are exempt (Paragraph 7(s) of the Second
Schedule to the Income Tax Act).
(v)
Labour Day Awards:
Labour Day awards paid to employees either in cash or in kind are non-taxable.
(vi)
Per Diem or Travel Allowances:
Per diem or subsistence allowances, including lunch allowances paid while working out of the office are not subject to
PAYE as these are not emoluments. Emoluments are earned as a consequence of rendering a service to an employer
or for holding office while per diem is paid for working away from home.
27.0
TAX TREATMENT OF CERTAIN EXPENSES
27.1
TAX TREATMENT OF EXPENSES INCURRED ON ENTERTAINMENT, HOSPITALITY AND GIFTS
Expenses incurred on entertainment, hospitality and gifts are not allowable, subject to the following exceptions:
a) where the business is one whose purpose is to provide entertainment or hospitality e.g.
hotels, restaurants, cinemas
and theatres, the cost of providing those services is allowable;
b) where entertainment is provided free of charge with the purpose of obtaining publicity from the general public e.g. free
seats for critics at a cinema;
c) where an employer provides entertainment such as Christmas Party for employees or hospitality for employees in form
of meals, accommodation etc. on business trips;
d) where a person gives gifts which bear an advertisement for the donor, e.g. calendars, pens, key holders, diaries and other
such like items, as long as the cost of the gift(s) to any one person does not exceed K100 in a charge year. The cost of gifts
in excess of K100 to the same person is disallowable.
NOTE:
(i) Employees receiving entertainment allowances will be taxed under PAYE and the amount would be disallowable to the
employer.
(ii) Where an employer defrays entertainment expenses directly, the cost will be disallowable to the employer but there will
be no charge on the employee unless the normal rules regarding benefits apply.
27.2
TAX TREATMENT OF CANTEEN EXPENSES, REFRESHMENTS AND FOOD RATIONS
Where the employer incurs expenditure on the provision of refreshments, canteen meals, food rations or any other meals
(except on business trips) to employees, the benefit arises in the hands of the employees. As the benefit cannot be converted
into money’s worth, it is not taxable on the employee.
Under the provisions of Section 44(l) of the Income Tax Act, the whole expenditure on refreshments, canteen meals etc. is
disallowable on the employer.
However, where an employer is obliged to provide meals to employees either under any other law or circumstances peculiar
to the employer, the cost may be deductible.
Where the provision of such food is a legal obligation, the full cost of providing the food ration may be an allowable deduction.
42
28.0
PAYMENTS ON CESSATION OF EMPLOYMENT
The following payments may be made on cessation of employment by way of dismissal, resignation, end of contract term,
redundancy/retrenchment, retirement or death:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)
Pension
Refund of employee’s pension contributions
Withdrawal of employer’s pension contributions
Gratuity
Redundancy pay
Severance pay or compensation for loss of office
Salary in lieu of notice
Repatriation allowance
Service bonuses eligible for payment only at the end of employment
Monthly salary
Commutation of accrued leave days
Accrued service bonuses
Following the amendment to the Constitution, with effect from 5th January 2016, the payments below are exempt from tax as
they fall within the definition of pension benefit:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
Pension;
Refund of employee’s pension contributions;
Withdrawal of employer’s pension contributions;
Gratuity;
Redundancy pay;
Severance pay or compensation for loss of office;
Salary in lieu of notice;
Repatriation allowance; and
Service bonuses eligible for payment only at the end of employment.
On the other hand, the following payments are taxable under the applicable PAYE bands:
(j)
(k)
(l)
Monthly salary;
Commutation of accrued leave days; and
Accrued service bonuses.
The monthly salary, commutation of accrued leave days and accrued service bonuses are taxable because they are emoluments
that have been earned during the course of one’s employment. Note that accrued service bonus is one which is linked to
performance and is taxable in the period in which it accrues.
28.1
TAX TREATMENT OF PAYMENTS MADE ON MEDICAL DISCHARGE
Where the employer, on advice from a registered medical practitioner or medical institution, determines that an employee
is permanently incapable of discharging his/her duties through infirmity of mind or body, the employer may terminate the
services of such an employee.
A payment made to an employee on termination of employment on medical grounds is exempt from tax.
29.0
TAX TREATMENT OF ADVANCE AGAINST GRATUITY, PENSIONS AND EMPLOYEE PENSION WITHDRAWALS
BY AN INDIVIDUAL CONTINUING IN EMPLOYMENT
Payments in the form of advances against gratuity, pensions and employee pension withdrawals are exempt from tax because
they constitute pension benefits.
30.0
TAX TREATMENT OF SETTLING IN ALLOWANCES
Settling in allowances, by whatever name called, paid to new employees and employees on transfer constitute an individual’s
income and should be subjected to tax under the PAYE Scheme.
31.0
TAX INCENTIVES FOR A RURAL ENTERPRISE
An enterprise operating in a location classified as a rural area is entitled to tax incentives.
43
Paragraph 5(a) of the charging schedule states that enterprises operating in an area classified as a rural area are entitled to
claim a reduction by one seventh of the tax which would be chargeable on their income for each of the first five charge years
for which that business is carried on.
Section 2 of the Income Tax Act defines a “rural enterprises” as –
(a) a manufacturing business which commenced on or after the 1st April, 1976;
(b) a hotel, motel or lodge which commences on or after the 1st April, 1981;
and which is located in a rural area.
Furthermore, the Income Tax Act defines rural area as;
“any area which is not an area declared or deemed to have been declared an area of any city or municipality under the
Local Government Act (Cap 281) but excluding the area declared to be the area of the Kafue township under the said Act”;
Example 10: Tax payable by a rural enterprise
ABC Lodge commenced operations in 2022 and is located in a rural area. It has taxable income of K10,000 for the 2022 charge
year.
In the first year, the calculation will be as follows:
Tax payable: 30% X 10,000 = 3,000
Rural enterprise incentive: 1/7 X 3,000 = 428.57
Final tax: 3,000 – 428.57 = 2,571.43
Therefore, instead of paying K3,000, ABC Lodge shall pay K2,571.43.
NOTE
To access the incentive, the taxpayers are advised to submit their returns for income tax purposes and reduce the tax amount
payable by one seventh for each of the first five (5) years the business is carried on.
32.0
TREATMENT OF FORFEITURE AND SURRENDER OF SHARES
When a shareholder forfeits or surrenders a share to the company it will not attract Property Transfer Tax (PTT) since the
forfeiture or surrender does not amount to a transfer.
If the share is subsequently transferred to another person by the company, PTT is payable and assessment of the tax is
dependent on the value at which the share could have been sold on the market at the time of the transfer.
Furthermore, the shareholder whose shares have been forfeited or who has surrendered shares, will not be required to submit
a provisional return. On the other hand, a company selling previously surrendered or forfeited shares, is required to furnish a
provisional return of tax and account for the PTT applicable.
NOTE
In order for a transaction to qualify as a surrender or forfeiture, the following conditions must be fulfilled:
(i)
(ii)
(iii)
33.0
No consideration;
Shares were not paid up for; and
There has been a call on the shares that have not been paid for
PAY AS YOU EARN REFUNDS
There are a number of circumstances or scenarios, which could give rise to a tax refund of PAYE. These include:
1.
Errors
The errors may include:
•
Payroll errors;
•
Use of wrong tax bands and rates;
•
Arithmetical errors in calculating tax; and
•
Taxation of exempt income e.g Taxation of pension benefits.
44
2. Unemployment
A tax refund may arise upon cessation of employment, and the person remains unemployed until the end of the charge year.
3. Eligible deductions such as professional subscriptions, donations
Tax Free Threshold and Tax bands
PAYE is paid in graduating bands with the lowest band paid at 0% for the year e.g the lowest band in 2023 charge year is
K57,600. The tax bands are simplified into monthly bands because of the frequency of payments that employees receive with
the first K4,800 taxed at 0%. At the end of the year the tax calculated from monthly bands should equal to the tax calculated
using annual bands.
In a case where an employee did not work or receive an income for all the months in that charge year, the cumulative tax from
the monthly calculations will not equal to the tax calculation from annual bands. In such an instance, one may apply to ZRA
for an assessment of the tax payable based on the annual bands; at the end of the charge year, using the ZRA prescribed forms.
Any resulting difference between the tax payable and the tax paid is either refundable to the employee or payable to ZRA.
Example 11: Calculation of Pay As You Earn Refund
An employee has been in employment and receives a monthly pay from January 2023. The pay is K14,000 per month. To assess
the amount refundable to the employee, if he stops work in August and remains unemployed for the rest of the year, the tax
refund shall be calculated as follows:
Table 19: Taxable amount in month 1 (January) K14,000
If the salary remains constant, the tax payable for each of the months the employee remains in employment will remain the
same at K2,942.50.
Table 20: Total cumulative taxable amount in month 8 (August) for a monthly income of K14,000: K112,000
Table 21: Total cumulative taxable amount in month 12 (December): K112,000
45
Since the employee left employment in month 8, the income earned as at month 8 will be taxed as though it was income
earned up to month 12.
Subjecting the K112,000 to tax using month 12 tax tables results in tax due which is less than tax due for month 8. This is
because in month 12 the income taxed at 0% is K57,600 (K4,800 X 12) while in month 8 the income taxed at 0% is K38,400
(K4,800 X 8). Therefore, this has pushed more of the employee’s income into the first band since the tax-free band is applicable
for the whole year regardless of whether an employee works for the whole year or not.
In addition, the income taxed at 37.5% in month 12 (K1,950) is far less than the income taxed in month 8 (K15,300) at that
rate.
Tax component of donations to an approved public benefit organisation
At the end of a charge year, an individual can make claims for tax relief on the component of their income from employment
which is given as contributions made to an approved public benefit organisation.
However, the allowable deduction on the contribution should not be more than 15% of the taxable income for the given
charge year.
Example 12: Calculation of Tax Refund when a donation is made
An employee receives a gross pay of K150,000 for the 2023 charge year and makes a donation to an approved public benefit
organisation of K25,000. Calculation of their tax refund will be as follows:
Table 22: Month 12 (December) tax computation before the donation
Gross Amount for YTD: Deduction from gross emoluments (15% Gross pay):
Taxable Amount:
K150,000
(K22,500)
K127,500
Although the amount donated in the year is K25,000, the allowable deduction should not exceed 15% of the taxable income.
The amount due for tax refund will be computed as shown in the table below:
Table 23: Month 12 (December) tax computation
34.0
ADMINISTRATION OF THE DISABILITY CREDIT AND DEDUCTION FOR EMPLOYING PERSON WITH A
DISABILITY
(i)
46
Disability Credit
Any employee who is registered with the Zambia Agency for Persons with Disabilities is entitled to a credit. The credit
is supposed to be granted by the employer as they compute the tax payable for the employee with a disability. Therefore,
the employer when computing the tax to be paid by person with a disability should reduce the tax amount by the tax
credit which is currently at K7,200 per annum (K600 per month).
Example 13: Computation of Tax credit for persons with disabilities
XY Limited has employed a person who has a disability and is registered with the Zambia Agency for Persons with Disabilities.
The said employee gets a monthly salary of K12,000. The tax credit will be granted as follows through the employer:
Table 24: Tax credit computation by the employer in the month of January
As shown in table 24 above, the employer will deduct and remit tax of K1,592.50 instead of K2,192.50.
Note:
Where an employee has not enjoyed the tax credit during the year, at the end of the charge year, such an employiee shall only
get a refund to the extent of the tax paid. For example, if the employee paid tax of K2,400 in a charge year, the difference
between K7,200 (tax credit) and K2,400 (tax paid), which is a K4,800, is not what the employee will be refunded at the end of
the year. Instead the K2400 is the tax which will be refunded.
(ii) Deduction for Employing a Person with a Disability
An employer is entitled to a deduction of K2,000 per annum in ascertaining the gains or profits of the business in respect of
each person with a disability who has been employed on a full-time basis.
The person with a disability in respect of whom a deduction is claimed should be registered with the Zambia Agency for
Persons with Disabilities.
Example 14: Allowable deduction for employers with employees with disabilities
Assuming XY Limited in the example above has business profits of K300, 000 in the charge 2022 and has 3 employees with
disabilities. XY Limited has also incurred expenses amounting to K30,000, that are wholly and exclusively for the purpose of
the business.
The taxable income will be calculated as follows:
Table 25
35.0
TAXATION OF PAYMENTS TO NON-RESIDENT CONTRACTORS FOR HAULAGE OPERATIONS
The tax treatment of payments made to non-resident contractors (foreign hauliers or importers) will depend on the facts of
the case. Some of the common scenarios and tax treatment will be as follows:
Where a Zambian Taxpayer hires non-resident transporter to(i)
Load goods from Zambia to Country A - the income is deemed to have its source in Zambia in accordance with Section 18
of the Income Tax Act and therefore the income due to the non-resident is liable to income tax computed in accordance
47
with Section 28. However, withholding tax is still applicable on the respective payments to non-resident contractors in
accordance with Section 81A of the Income Tax Act. The WHT in this case is not a final tax.
(ii) Transports goods from Country A to Country B – the source or deemed source in this case is not Zambia. Therefore, no
withholding Tax is deductible by the Zambian payer and no income tax is payable in Zambia by the transporter.
(iii) Transports goods from Country C to Zambia - the source is not in Zambia and thus no withholding tax is deductible by
the Zambian payer and no income tax is payable by the transporter.
(iv) Transports goods from Kitwe to Lusaka (within Zambia) – the source in this case is Zambia and withholding tax is
deductible by the Zambian payer. No income tax is payable by the transporter. However, where the activities of the nonresident transporter create a Permanent Establishment (PE), the profits attributed to the PE become taxable in Zambia at
30% of taxable profits.
36.0
TAX TREATMENT OF EMPLOYMENT INCOME EARNED IN ZAMBIA FROM NON-RESIDENT EMPLOYERS
Zambia primarily taxes at source in line with section 14 of the Income Tax Act. Therefore, where the source of the employment
income is Zambia, it is consequently subject to tax in Zambia at the applicable tax rates, irrespective of the period spent in
Zambia. Furthermore, Section 18(1)(b) of the Income Tax Act deems income to be from a source within the Republic if the
income is remuneration from employment or office held in Zambia or by virtual of any service rendered, or work, or labour
done by a person in Zambia.
Therefore, an employee who is based in Zambia whether a Zambian resident or not will be liable to Pay As You Earn (PAYE)
on the income earned from exercising employment in Zambia. This is irrespective of whether payment is made outside the
Republic or by a non-resident.
37.0
MIGRATION FROM TURNOVER TAX TO INCOME TAX
A person who is on Turnover Tax (TOT) and exceeds the TOT threshold (i.e turnover above K800,000) during the course of
the charge year is required to notify the Commissioner General immediately. However, the taxpayer will continue to pay TOT
until the end of the charge year and shall be assessed under TOT up to the end of the charge year. At the beginning of the next
charge year, they will be deregistered for Turnover Tax and migrated to Income Tax where they will be assessed.
Note:
Regulation 6 of the TOT Regulations, SI No.47 of 2009 (Change from Income Tax to Turnover Tax or Vice Versa) allows the
change to take place at any time of the year. However, Zambia Revenue Authority will only effect the change in the system at
the beginning of the next charge year.
38.0
TAX TREATMENT OF CERTAIN WINNINGS UNDER GAMING AND BETTING
(i)
How to compute Net Proceeds where winnings are non-monetary e.g. A car given as a prize for a lottery.
Where prizes are awarded in the form of property or a benefit that is non-monetary, the net proceeds in this case will
be calculated based on the value as determined by the Commissioner-General. The applicable presumptive Tax rate
will be applied on the Net Proceeds in accordance with Section 64 and the Ninth Schedule to the Income Tax Act.
The Net proceeds” means the gross proceeds less sums paid out for the prizes.
(ii)
Whether one-time organisers of lotteries should also register and account for Presumptive Tax (PRT) considering
that registrations for PRT and ITX are mutually exclusive.
Where a taxpayer whose business is not a lottery but organises a lottery for the purpose of promoting their business,
they shall not be required to account for Presumptive Tax if the lottery entry requirement is such that one is supposed
to purchase products of the business. However, where the taxpayer sells lottery tickets they shall be required to register
for Presumptive Tax and account for it accordingly.
(iii)
Who should account for PRT and WHT regarding slot route operations, the gaming machine owners or location
owners.
A slot route operator is a business that owns and operates gaming machines in several locations. These locations are
usually retail businesses run by other persons. For such gaming operations the absolute owner of the machines is
required to account for the Presumptive Tax and Withholding Tax arising from operation of the machines.
48
39.0
VALUE ADDED TAX TREATMENT OF VARIOUS SERVICES
39.1
HIRE OF EQUIPMENT FOR LOADING AND OFFLOADING OF PASSENGERS FROM AIRCRAFT
The service is not exempt from VAT and is not zero-rated as such should be subject to VAT at standard rated. It should be
noted that this service is distinct from transportation of persons by air which is exempt.
39.2
LOADING OF CARGO FOR EXPORT FROM ZAMBIA
The service of loading cargo for export, including exports out of bond, is standard rated.
39.3
OFFLOADING OF CARGO FROM OUTSIDE ZAMBIA
The service of offloading imports into Zambia is standard rated.
39.4
ANCILLARY SERVICES RELATING TO GOODS TRANSITING THROUGH ZAMBIA
The law relating to freight transport services is provided in Group 1(b) of the Value Added Tax Zero-Rating Order and states
as follows:
Group 1 - Export of Goods
(b) the supply of freight transport services(i)
from or to the Republic; and
(ii)
from outside the Republic to other places outside the Republic transiting through the Republic including
transshipment.
Effective 1st January 2020, ancillary services provided in relation to transit of goods through Zambia from outside the
Republic to destinations outside the Republic are standard rated with the exception of transshipment.
Therefore, services such as escort security services, clearing services and storage services are standard rated.
NOTE:
Transshipment is the moving of cargo that is in transit from one vessel of transportation to another under customs control.
In light of the definition above, it means that the services that are zero-rated under transshipment are charges for cranes, folk
lifts and other services utilised in moving cargo from one vessel of transportation to another under customs control.
39.5
COLD CHAIN SERVICES
Services that are rendered to facilitate the exportation of perishables from Zambia to destinations outside Zambia are standard
rated.
39.6
CLEARING AND FORWARDING SERVICES
Clearing and forwarding services are standard rated.
Table 26: Summary of Value Added Tax treatment of ramp services
49
NOTE:
Transhipment is the process of moving cargo that is in transit from one vessel of transportation to another.
40.0
PARTIAL APPORTIONMENT FOR LEASING
A Finance Lease comprises the following:
(i) the principal (capital) which is standard rated; and
(ii) the interest that is exempt.
In accordance with Section 18 and Rule 10, a taxable supplier carrying on the business of finance leasing is required to
apportion the input tax using methods provided in Second Schedule to the VAT Administrative Rules. Therefore, input tax on
the asset and other expenses incurred for the purpose of rendering finance leasing should be apportioned.
41.0
VAT TREATMENT OF IMPORTED SERVICES (REVERSE VAT)
Where a person imports a service from a foreign supplier, the following tax treatment will apply.
1. An importation of an exempt service by a taxable supplier is not liable to reverse VAT;
2. An importation by a person not eligible to register based on nature of supplies (exempt supplies) or nature of person
(privileged person) is outside the scope of reverse VAT; and
3. A supplier dealing in taxable supplies but not registered due to not meeting the registration conditions under Section 28
(taxable turnover below threshold), is outside the scope of reverse VAT administration.
NOTE:
One of the conditions that must be fulfilled in order for reverse VAT not to be chargeable on the recipient of a service is that
the foreign provider of the service should have paid the tax in the country of exportation. The evidence required is payment
receipt issued by the tax authority of the country of exportation.
42.0
RECOVERY OF VAT CHARGED ON EXEMPT SUPPLIES OR VAT CHARGED BY A NON-REGISTERED SUPPLIER
Where a registered supplier charges VAT on exempt supply of goods or services, and such tax is shown on an invoice as tax
chargeable on such supplies, the tax charged is recoverable by the Government. In the same vein, where a non-registered
supplier issues an invoice with an amount shown as tax chargeable on the supply of goods or services, such amount is
recoverable as tax due.
43.0
INVOICES TO SUPPORT INPUT CLAIM
A registered supplier is required to have a valid tax invoice to support input claim at the point of filing a return. A valid tax
invoice is the one that has mandatory features as prescribed in the Commissioner-General’s Rules.
44.0
VAT ZERO-RATING LOCAL PURCHASE ORDERS
A registered supplier is required to charge VAT on goods and services that are standard rated. However, a privileged person
can purchase standard rated supplies with tax charged at the rate of zero per cent (0%) using VAT zero-rating Local Purchase
Orders (VAT LPOs). In an event that a person who qualifies to obtain and issue an LPO does not avail an LPO to the supplier
at the time of purchase, the supplier is mandated to charge VAT at the standard rate. Such VAT, as correctly charged in the
absence of a VAT LPO, will not be refunded in a case where such a person subsequently avails an LPO to prompt the refund.
NOTE:
upplies to privileged persons not supported with VAT LPOs will be regarded as standard rated supplies and will be assessed
as such.
45.0
COMMISSION EARNED BY INSURANCE BROKERS
Where an insurance broker earns commission from insurance companies in the course of arranging insurance services
(brokerage services), the commission earned is not subject to Insurance Premium Levy (IPL). This is because IPL is charged
on insurance premiums and commission earned does not qualify to be considered an insurance premium.
50
46.0
CLEARING OF GOODS USING GOVERNMENT VOUCHERS
The Government in some cases provides relief wherein the Government pays for the applicable duties and taxes using
Government vouchers. This type of relief is most commonly applied when clearing motor vehicles from bonded warehouses.
Although the motor vehicles are physically in the country they have not yet been cleared for local consumption. Therefore, the
clearance process is similar to the process for clearing goods which are being brought across the borders.
NOTE:
For goods supplied out of bond, VAT zero-rating Local Purchase Orders (VAT LPOs) are not applicable since the goods have
not been final cleared.
47.0
PENALTY FOR UNDERDECLARING TOURISM LEVY
Example 15: Calculation of Penalty for Under declaration of Tourism Levy
SELF-ASSESSMENT BY TAXPAYER
A taxpayer declares tourism levy in their return as follows:
K
(i) Accommodation for 2 nights at K750.00
1,500.00
(ii) Meals and beverages
600.00
(iii) Conference room
1,000.00
Total
3,100.00
Tourism levy at 1.5%
46.50
RECOMPUTED TOURISM LEVY
After an audit, it is discovered that the taxpayer had understated the amounts and the return should have been as follows:
K
(i) Accommodation for 5 nights at K750.00
3,750.00
(ii) Meals and beverages
1,000.00
(iii) Conference room
1,500.00
Total
6,250.00
Tourism Levy due (1.5%) Tourism Levy already declared
Tourism Levy underdeclared COMPUTATION OF PENALTY
(i) Accommodation amount omitted (3750 – 1500)
(ii) Meals and beverages amount omitted (1000 – 600)
(iii) Conference room amount omitted (1500 – 1000)
Total amount omitted
Penalty (5% of K3,150)
93.75
(46.50)
47.25
K
2,250.00
400.00
500.00
3,150.00
157.50
TOTAL PAYABLE
Penalty due
157.50
Under declared 47.25
TOTAL 204.75
48.0
TAX RATES
(a) Personal Income Tax Rates: Personal Income tax rates are as follows:
Table 27
51
(e)
Turnover Tax Rates:
Table 28: Turnover Tax
Table 29: Rental income
(f)
Presumptive Tax: Tax on motor vehicles for the carriage of persons is as follows:
Table 30
(g)
Presumptive Tax: Artisanal mining or Small-scale mining
(h)
Base Tax:
Table 31
52
(i)
Other Income Tax Rates
Table 32
Category
Mineral processing
Mining
Manufacturing of products using copper cathodes
Electronic Communication business
Lapidary and Jewellery facilities (Value addition to gemstones)
Manufacturing & other companies
Approved Public Benefit Organisation (on income from business)
Agro-processing
Farming
Non-traditional exports – Agro-processing and Farming
Non-traditional exports – Others
Chemical manufacture of fertilizer
Organic manufacture of fertilizer
Trusts, deceased or bankrupt estates
Rural enterprises
Rate (%)
30
30
15
35
25
30
15
10
10
10
15
15
15
30
Tax chargeable reduced by 1/7 for
5 years
Income received by a person providing accommodation and food 15
services (for the charge years 2021 and 2022)
Income received by a person carrying on the business of 0
manufacturing ceramic products (for the charge years 2022 and
2023)
Income earned from exports of a business enterprise approved by 0% on income earned in the first 10
the Zambia Development Agency and carrying on manufacturing years from commencement of
activities in a multi-facility economic zone or an industrial park works
(For ZDA licences obtained after 1st January 2022)
Rate reduced by 50% of the
applicable rate from year 11 up to
year 13
Rate reduced by 25% of the
applicable rate in the 14th and 15th
years
Business enterprise operating in a priority sector declared under 0% for the first 5 years, starting
the Zambia Development Agency Act, 2006 (For ZDA licence from the first year profits are
holders obtained prior to 1st January 2013)
returned
Rate reduced by 50% from 6-8
years, after profits are returned
Rate reduced by 25% from 9-10
years, after profits are returned.
No reduced rate after 10th year
profits are returned.
Small and Micro Enterprises operating in an urban area under the 0% for the first 3 years
Zambia Development Agency Act, 2006 (For ZDA licence
holders obtained prior to 11th October 2013)
Small and Micro Enterprises operating in a rural area under the 0% for the first 5 years
Zambia Development Agency Act, 2006 (For ZDA licence
holders obtained prior to 11th October 2013)
53
0% for the first 5 years, starting
from the year of commencement of
operations of the approved
investment
Rate reduced by 50% from 6-8
years starting from the year of
commencement of operations of
the approved investment
Rate reduced by 25% from 9-10
years starting from the year of
commencement of operations of
the approved investment
No reduced rate after the 10th year
starting from the year of
commencement of operations of
the approved investment
Rural Business, Business enterprise operating in a Multi Facility 0% for the first 5 years from
Economic Zone or Industrial Park declared under the Zambia commencement of operations of
Development Agency Act, 2006 (For ZDA licence holders the approved investment
obtained between 11th October 2013 to 31st December 2014)
Business enterprise carrying on manufacturing activities in a rural 0% for the first 5 years from
area, Multi Facility Economic Zone or Industrial Park (For ZDA commencement of operations of
licence holders obtained between 1st January 2015 and 31st the approved investment
December 2016)
Business enterprise carrying on manufacturing or electricity 0 % for the first 5 years from
generation located in a rural area, Multi Facility Economic Zone commencement of operations of
or Industrial Park (For ZDA licence holders obtained between 1st the approved investment.
January 2017 and 31st December 2017)
Business Enterprises operating in a priority sector declared under Claim on a straight-line basis, wear
the Zambia Development Agency Act, 2006 (For ZDA licence and tear at an accelerated rate, not
holders obtained on or after 1st January 2018)
exceeding 100% in respect of any
or
new
implement,
plant
machinery acquired and used by
the business for the purposes of
that business.
Agro-processing business carrying on manufacturing and 0% of the standard income tax rate
processing of corn starch Businesses in a Multi-Facility Economic from 2023 to 2032 charge years
Zone or Industrial Park.
50% of the standard income tax
rate from 2033 to 2035 charge
years.
75% of the standard income tax
rate from 2036 to 2037 charge
years
Business enterprise operating in a priority sector, multi facility
economic zone and industrial park declared under the Zambia
Development Agency Act, 2006 (For ZDA licence holders
obtained between 1st January 2013 and 10th October 2013)
Special purpose vehicle under a Public Private Partnership Project 15% on the first 5 years that a
special purpose vehicle makes a
profit from a project
54
(j)
Withholding Tax Rates
Table 33
Category
Distributed income of an income real estate investment trust (REIT)
Dividends (Resident)
Dividends (Non-Resident)
Dividends paid by a company carrying on mining operations
Dividends paid to an individual by a company listed on the Lusaka Securities Exchange
(LUSE)
Dividends paid by a company engaged in the assembly of motor vehicles, motor cycles
and bicycles
Dividends declared from farming income
Dividends paid by a company operating in a multi-facility economic zone or industrial
park under the Zambia Development Agency Act, 2006, on profits made on exports (for
licences obtained after 1st January 2022)
Dividends paid by a business enterprise operating in a priority sector declared under the
Zambia Development Agency Act, 2006 (For ZDA licence holders obtained prior to 1st
January 2013)
Dividends paid by a business enterprise operating in a priority sector, multi facility
economic zone and industrial park declared under the Zambia Development Agency Act,
2006 (For ZDA licence holders obtained between 1st January 2013 and 10th October 2013)
Dividends paid by a rural business, business enterprise operating in a Multi Facility
Economic Zone or Industrial Park declared under the Zambia Development Agency Act,
2006 (For ZDA licence holders obtained between 11th October 2013 to 31st December
2014)
Dividends paid by a business enterprise carrying on manufacturing activities in a rural
area, Multi Facility Economic Zone or Industrial Park (For ZDA licence holders obtained
between 1st January 2015 and 31st December 2016)
Dividends paid by a business enterprise carrying on manufacturing or electricity
generation located in a rural area, Multi Facility Economic Zone or Industrial Park (For
ZDA licence holders obtained between 1st January 2017 and 31st December 2017)
Dividends paid by Agro-processing business carrying on manufacturing and processing of
corn starch Businesses in a Multi-Facility Economic Zone or Industrial Park
Interest on Treasury Bills, GRZ bonds and Corporate Bonds– Residents (Final Tax for
Individuals and Exempt Organisations Only)
Interest on GRZ bonds and Treasury Bills – Non-Residents
Interest from green bonds listed on a securities exchange in Zambia with maturity of at
least 3 years.
Interest for individuals (interest earned on all interest-earning accounts held by individuals
with institutions registered under the Banking and Financial Services Act, 2017)
Interest (Residents)
Interest (Non-Residents)
Interest earned from a Life Insurance policy
Interest earned by individuals from loans advanced to members under the savings groups
such as co-operatives and village banking
Royalties (Residents)
Royalties (Non-Residents)
Commissions (Residents)
Commissions paid to Non-Resident persons (Final Tax)
Public Entertainment Fees for Residents
Public Entertainment Fees for Non-Residents (Final Tax)
Management and Consultancy Fees to Residents
Management and Consultancy Fees to Non-Residents
Management or consultancy fees and interest paid to a non-resident contractor by a
business enterprise operating in a priority sector declared under the Zambia Development
Agency Act, 2006 (For ZDA licence holders obtained prior to 1 st January 2013)
Rate (%)
15
15
20
0
0
0 (First 5 years)
0 (First 5 years)
0 (First 10 years from
commencement of works)
0% for the first 5 years from
the year profits are declared
0 % for the first 5 years from
commencement of operations
0% for the first 5 years from
commencement of operations
of the approved investment
0% for the first 5 years from
commencement of operations
of the approved investment
0 % for the first 5 years from
commencement of operations
of the approved investment
0% from 2023 to 2032 charge
years
15
15
0
0
15
20
0
0
15
20
15
20
Not applicable
20
15
20
0% for the first 5 years from
the first date that the payment
was due.
55
NOTE:
(i)
Interest includes that awarded by the Courts of Law.
(ii)
The term “Royalty” includes income from leasing and therefore leasing income is subject to withholding tax. This
determination is derived from the definition of royalty which recognises a payment for the use of or right to use
commercial, industrial, or scientific equipment as a royalty. Payments for hiring of commercial, industrial, or scientific
equipment attract royalties. Note that the application of withholding tax excludes a finance lease.
(iii)
Only winnings from gaming, lotteries or betting other than winnings from a brick and mortar casino are subject to
withholding tax.
(g) VAT Rates
Table 34
56
(h) Local Excise
Table 35
Excisable Product
Tobacco Refuse
Statistical Unit of
Quantity
Kg
Rate
K361 per Kg or 145% whichever is
higher
K361 per mille
Cigars, cheroots, cigarillos and Cigarettes, of tobacco or
tobacco substitutes
Pipe Tobacco
Mille
Cutrag & Other tobacco products
Kg
Products containing tobacco, reconstituted tobacco,
nicotine or nicotine products.
Clear Beer Made from Malt.
Kg
Clear Beer Made from Cassava
Clear Beer Made from Sorghum
Opaque Beer
Coal
Diesel (Gas Oil)
Petrol (Motor spirits)
Heavy Fuel Oil
Hydrocarbon Gases
Aviation Spirit
Jet Fuel
White Spirit
Kerosene
Other Light Oils
Ethyl Alcohol
Methylated Spirits and Other Ethyl alcohol and other
spirits, denatured,
Wines
Undenatured Ethyl Alcohol of an alcoholic strength by
volume less than 80%
Ciders
Other Fermented Beverages
Airtime
Litre
Litre
Litre
Tonne
Dekalitre
Dekalitre
Dekalitre
Litre
Dekalitre
Dekalitre
Dekalitre
Dekalitre
Dekalitre
Litre
Litre
60% (Suspended to 40% by SI 81 of
2015)
10%
20%
K0.25
5%
Fuel Levy K0.66 per litre
Excise K2.07/ltr,
Excise K9.30 per 10litre
Excise K0.48 per litre
K4.80 per dekalitre
K4.80 per dekalitre
15%
K0.48 ltr
15%
60%
60%
Litre
Litre
60%
60%
Litre
Litre
Minute for voice calls,
Megabyte for data,
Count for SMS and
Count for Others.
Kg
Kg
Kg
60% (Suspended to 40% by SI 2 of 2019)
60%
17.5%
Kg
Kg
15%
15%
Kg
Kg
100kWh
Tonne
Litre
15%
15%
3%
K40 per tonne
K0.30 per litre
Litre
K1.50/ltr
Kg
145%
Cosmetics
Plastic Carrier Bags for Shopping
Floor coverings of plastics, whether or not self-adhesive,
in rolls or in the form of tiles; wall or ceiling coverings
of plastics, as defined in Note 9 to this Chapter
Office or school supplies
Articles and clothing accessories, not elsewhere
specified, for use in the textile industry
Fittings for furniture, coachwork of the like
Statuettes and other ornamental
Electric Energy
Cement
Fruit Juices, Unflavoured and Unsweetened Waters,
Flavoured or Sweetened Waters
Reconstituted or recombined milk of a fat content, by
weight, of less than 1% up to a maximum of 10%.
Electronic cigarettes and similar personal
Electric vaporising devices
Kg
Litre
K361 per Kg or 145% whichever is
higher
K361 per Kg or 145% whichever is
higher
145%
20%
30%
15%
57
(i)
Property Transfer Tax Rates
(j)
Mineral Royalty
Table 37: Copper
Table 38: Other Minerals
(k)
Tax on Betting and Gaming
Table 39: Tax on Betting and Gaming
58
(l)
Other Rates – Insurance Premium Levy, Skills Development Levy, Tourism Levy
Table 40: Other Rates
(m)
Penalty Units
A penalty unit is K0.30.
59
49.0
MISCELLANEOUS MATTERS
49.1
Application for Taxpayer Identification Number (TPIN)
To apply for a TPIN on the web portal go to the ZRA Home page www.zra.org.zm, ensure that you use Chrome, Edge
or Firefox as your browser.
Step 1: Click on TaxOnline at the bottom left of the page, this will redirect you to the screen below:
Step 2: Select Register to start your registration, and enter the CAPTCHA this is just to verify that you are not a system
bug.
Step 3: Select type of taxpayer on the home page and begin your registration. There are a number of
options on the dropdown screen. Tax type selection have been automated depending on the Business
activity you have selected from PACRA.
60
Step 4: Complete the taxpayer type information then click next to select the reason for registration.
Step 5: Upload documents. This will depend on the type of taxpayer, for example;
(a)
Individual resident
1.
Copy of NRC
2.
Sketch
3.
map of physical address
(b)
Individual other
1.
Passport
2.
map of physical address
(c)
Company resident
1.
Certificate of incorporation
2.
Certificate of share capital
3.
PACRA form 3
4.
Map of physical address etc …

The system has a provision for you to pin your location when uploading documents.
NOTE:
-
TPINs and Login credentials for Business Names and Limited Companies will be sent to emails
and mobile because there is an interface between Zambia Revenue Authority and PACRA.
When you receive your default password, proceed to our website to complete your Tax type
registration.
Approvals for TPINs have been automated and are approved with immediate effect, and a copy will
be sent to your email and a notification to your mobile phone.
Log in Credentials must be created once the TPIN has been generated in order for you to have
access to the online portal.
All Notices and Certificates generated on the new system are now secured with QR code number
and Watermark.
61
49.2
Platforms for TPIN Registration:
-
All handsets: Use the USSD Code *858# on Zamtel or Airtel networks, using any handset,
click on TPIN Registration and follow the prompts.
Smart phones only: Download “TaxOnApp” from Play Store or from App Store. Once you
have clicked on the installed App, click on TPIN Registration and follow the prompts.
Online application: Go to the ZRA website https://www.zra.org.zm/ and click on the link
“INDIVIDUAL” for an individual TPIN or “BUSINESS” for a business TPIN. Under the
group Registration, click Get a TPIN and follow the prompts.
49.3
Application for Tax Clearance Certificates (TCC)
To apply for a Tax Clearance Certificates (TCC) Kindly follow the steps below.
Step 1: Go to the ZRA Home page www.zra.org.zm, ensure that your use Chrome, Edge or
Firefox as your browser.
Step 2 : Select Login
Step 3 : Log in to your account using your TPIN and password
Step 4 : Go to Compliance
Step 5 : Select Tax Clearance Certificate
Step 6 : Click on Apply
62
The TCC will then be generated and can be printed or saved.
49.4 EFD information:
Contact email address through which to seek Electronic Fiscal Device or “EFD” assistance or
information send an email to efdhelp@zra.org.zm.
49.5 Reporting TaxOnline System Challenges:
Contact email address through which to seek TaxOnline information or assistance– send an email
to advice@zra.org.zm.
49.6 Leaflets and other tax information:
To view leaflets and other tax documents, go to the ZRA website https://www.zra.org.zm/ and click
on ‘General Tax Information’
49.7 Tax Video Tutorials:
To access video tutorials on various online tax processes, go to the ZRA website https://www.zra.
org.zm/ and click on ‘Tutorials’
49.8 Reporting complaints of unethical nature:
• Write to: Chairperson – ZRA Integrity Committee, P.O Bos 35710, Lusaka OR
• Email: zraic@zra.org.zm or
• Phone: +260978701701 or;
• Drop your complaints in the Suggestion box at any of the ZRA stations
49.9 SCHEDULE
(Regulation 2 of the Income Tax (Local Content Allowance Regulations)
AGRICULTURAL PRODUCTS ALLOWED FOR LOCAL CONTENT ALLOWANCE
1. Cassava
2. Pineapple
3. Mango
4. Tomato
63
50.0
ZAMBIA REVENUE AUTHORITY CONTACT ADDRESSES:
If you have any queries concerning your taxes, please contact the Customer Experience Centres or your
nearest Direct Tax Office or the Indirect Taxes and Excise Tax Office at the following addresses:
64
65