Taxation in Zambia
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In Zambia, the Zambia Revenue Authority, a body under the Ministry of Finance, is in charge of collecting taxes on behalf of the Zambian Government.
Income in Zambia is taxed on the source principle or deemed source basis in some instances. Residents are taxed on domestic source of income and certain types of foreign income, non-residents are normally taxed on Zambian source of income. Zambia has the following direct taxes: Company Income Tax, Personal Income Tax, Withholding Tax, Presumptive Tax and Property Transfer Tax.
Corporate Income
[edit]- Company Income Tax
The general rate is 35 percent for both resident and non-resident companies. For companies involved in agriculture, manufacture of chemical fertilizer and non-traditional exports, the rate is 15 percent while that for mining is 30 percent and 40 percent on bank profits above K250 million
Reduced Rates and Suspension of Corporate Income Tax on profits from manufacturing of ceramic products. The table below gives a breakdown of the 2022 tax rates.[1][2][3]
| Tax Rate
2023 |
Tax Rate
2022 |
Prev.
Rate |
Notes | |
|---|---|---|---|---|
| Standard Corporate Income
Tax Rate |
 30.0%
|
 30.0%
|
35.0% | |
| Telecoms Companies | 35.0%
|
40.0%
|
40.0% | 2022: Rate with income exceeding ZMW 250,000.
2023: Plan to abolish two-tier taxation system in sector. |
| Manufacture of Ceramic Products | 0.0%
|
0.0% | N/A | Suspended for the 2022 and 2023 Charge years |
| Gemstone Industry Value Addition: | 25.0%
|
30.0%
|
35.0% | |
| Land based (brick and mortar) betting
companies presumptive tax |
15.0%
|
25.0%
|
25.0% | |
| Corn Starch Agro Processor | Operating in Multi-Facility Economic Zone (MFEZ), Industrial Park and Rural Area.
Corporate Income Tax to be graduated from 2023 to 2038 Withholding Tax on dividends to be waived from 2023 to 2033 |
| Rate
2023 |
Rate
2022 |
Prev.
Rate |
Note | |
|---|---|---|---|---|
| Public Private Partnership (PPP)
Wear and Tear Allowance |
 100%
|
on Implements, Plant and Machinery to be specifically used on a PPP Project | ||
| Rental Income and Turnover Tax | 0.0%
|
on first ZMW 12,000 (annually) Balance at applicable tax rate | ||
| Farm Improvement Allowance | ZMW 100,000
|
ZMW 20,000 | Allowable Deduction on construction cost of employee housing |
Reintroduction of tax incentives for companies operating Multi Facility Economic Zone (MFEZ) or Industrial Parks. The table below gives a breakdown of the Incentives[1][2]
| Category | Notes |
|---|---|
| Dividend Withholding Tax Relief | 0% for a period of 10 years starting from the year
of commencement of operations on profits derived from exports. |
| Corporate Income Tax for companies operating
in a MFEZ or Industrial Park will be charged at the following rates on profits derived from exports |
0% for a period of 10 years from first year
of commencement of works |
| 50% or profits taxed from 11th to 15th year | |
| 75% of profits taxed from 14th to 15th year |
Mineral Royalty
[edit]In 2022, for Mining Companies, the deductibility of mineral royalty for corporate income tax assessment purposes was reintroduced.[1][2][4]
| Price Range | Taxable Amount | Rate % |
|---|---|---|
| Less than US$ 4,000 per tonne | The first US$ 4,000 | 4.0 |
| US$ 4,001 per tonne upto US$ 5,000 per tonne | The next US$ 1,000 | 6.5 |
| US$ 5,001 per tonne upto US$ 7,000 per tonne | The next US$ 2,000 | 8.5 |
| US$ 7,001 per tonne or more | The Balance | 10 |
Import Taxes on Mining Equipment and Machinery
[edit]In September 2022, under Statutory Instrument (SI) No. 50 of 2022, the government offered additional tax exemptions by suspending import taxes on mining equipment and machinery.[6]
Personal Income Tax
[edit]All individuals are liable to tax on personal income after deducting personal relief at a graduated rate from 0 percent for incomes of K39600 per Annum (K3300 per month) and below. The rest at rates of 25 percent, 30 percent and 37.5 percent.
Changes were made to the PAYE tax brackets. The below table shows the breakdown.[1][2]
| Current Income Band
(ZMW) |
Tax Rate %
2022 |
Prev. Income Band
(ZMW) |
Tax Rate %
Prev. |
|---|---|---|---|
| 0 - 4,500 | 0 | 0 - 4,000 | 0 |
| 4,501 - 4,800 | 25 | 4,001 - 4,800 | 25 |
| 4,801 - 6,900 | 30 | 4,801 - 6,900 | 30 |
| Above 6,900 | 37.5 | Above 6,900 | 37.5 |
| Upcoming Income Band
(ZMW) |
Tax Rate %
2023 - |
Prev. Income Band
(ZMW) |
Tax Rate %
Prev. |
|---|---|---|---|
| 0 - 4,800 | 0 | 0 - 4,500 | 0 |
| 4,801 - 6,800 | 20
|
4,501 - 4,800 | 25 |
| 6,801 - 8,900 | 30 | 4,801 - 6,900 | 30 |
| Above 8,900 | 37.5 | Above 6,900 | 37.5 |
| Upcoming Income Band
(ZMW) |
Tax Rate %
2023 - |
Prev. Income Band
(ZMW) |
Tax Rate %
Prev. |
|---|---|---|---|
| 0 - 5,100 | 0 | 0 - 4,800 | 0 |
| 5,101 - 7,100 | 20 | 4,801 - 6,800 | 20 |
| 7,101 - 9,200 | 30 | 6,801 - 8,900 | 30 |
| Above 9,200 | 37
|
Above 8,900 | 37.5 |
Turnover Tax
[edit]The rate of 4 percent (from Jan 2019) is charged on business income for small scale businesses below a turnover threshold of K800 million per annum
This is charged at the rate of 5 percent of the open market value realised from the sale of any land and building and shares issued by a company incorporated in Zambia.
| Rate
2023 |
Rate
2022 |
Prev.
Rate |
Notes | |
|---|---|---|---|---|
| Transfer of Mineral Rights | 7.5%
|
10.0%
|
10.0% | Held by Exploration Companies |
| Transfer of Land, Shares and Intellectual Property |  7.5%
|
5.0%
|
5.0% | |
| Share in Mining Right and an Interest in Mineral Processing License | Golden | |||
| Forfeiture or Surrender of Shares | 0.0%
|
5.0%
|
5.0% | Exempt from PPT |
| Disposal of a Distressed Property by a Financial Services Provider | Realized Value | Realized Value to be the Actual Price Received |
Withholding Tax
[edit]Withholding tax of 10 percent on rental income (final tax) and 20 percent on dividends, interest payments, royalties, commissions, management and consultancy fees and payments to subcontractors. Payments made to non-residents are also subject to withholding tax at 20 percent in all cases except where there is a double taxation agreement in effect Zambia also charges Indirect taxes: Import Duty, Excise Duty and VAT (Value Added Tax). VAT rate is at 16%, with some items being exempted or zero-rated.[9] The table below gives a breakdown of the Withholding Tax rate reforms.
| Rate
2023 |
Rate
2022 |
Prev.
Rate |
Notes | |
|---|---|---|---|---|
| Withholding tax on interest earned by individuals from loans
advanced by members under the savings groups such as co-operatives and village banking. |
0.0%
|
15.0%
|
15.0% | |
| Withholding tax on investment income on life insurance funds | 0.0%
|
15.0%
|
15.0% | |
| Withholding tax interest income earned on green bonds listed
on the securities exchange in Zambia with maturity of at least 3 years |
0.0%
|
20.0%
|
20.0% | |
| Withholding tax on re-insurance including retrocession | 0.0%
|
20.0%
|
20.0% | |
| Withholding tax on winnings from gaming and betting | 15.0%
|
20.0%
|
20.0% |
Value Added Tax
[edit]Value Added Tax on Goods and Services is rated at 16% unless otherwise specified.
In September 2022, the UPND government reinstated Diesel and Petrol VAT rate.[10]
The table below gives a breakdown of the VAT rate reforms.
| Rate
2023 |
Rate
2022 |
Prev.
Rate |
Notes | |
|---|---|---|---|---|
| Select ICT and Telecommunications Equipment | 0.0%
|
16.0%
|
16.0% | |
| Supply of Milk Cans, Churns and Milking Machines | 0.0%
|
16.0%
|
16.0% | |
| Gaming, Betting and Lotteries | 0.0%
|
16.0%
|
16.0% | |
| Imports of Game Animals (Breeding Stock) | 0.0%
|
16.0%
|
16.0% | |
| Public Private Partnership (PPP) Projects Imported Machinery | 0.0%
|
VAT relief where duty is waived under the customs and excise regulations | ||
| Public Private Partnership (PPP) Projects Special Purpose Vehicle (SPV) | Claim | Input VAT for first four (4) years |
Customs and Excise
[edit]In September 2022, the UPND government reinstated Diesel and Petrol excise duty.[10] In December 2022, the government amended the customs duty rate in Chapter 27 of the Customs and Excise Act Cap 322 from 25% to free rate (0%). This applied to importation of petrol and low Sulphur gas oil and came into effect on 1st January 2023.[11]
The table below gives a breakdown of the Custom and excise rate reforms.
| Rate
2023 |
Rate
2022 |
Prev.
Rate |
Notes | |
|---|---|---|---|---|
| Tourism: Customs Duty on Importation of Safari Vehicles | 0.0%
|
0.0%
|
Suspended till 31st December 2025 | |
| Tourism: Customs Duty on Select Imported Capital Equipment, Machinery, Fittings and Fixtures | 0.0%
|
Suspended till 31st December 2025 | ||
| Agriculture: Customs Duty on Biological Agents | 0.0%
|
5.0%
|
5.0% | Removed |
| Agriculture: Customs Duty on Greenhouse Plastics | 0.0%
|
Suspended till 31st December 2025 | ||
| Agriculture: Customs Duty on Machinery, Equipment and Articles used in Aquaculture | 0.0%
|
Suspended till 31st December 2025 | ||
| Agriculture: Customs Duty on Vegetable Seedling Growing Media, Peat Moss | 0.0%
|
Removed | ||
| Agriculture: Customs Duty on Select Tree Crop Seedlings | 0.0%
|
5.0%
|
5.0% | Removed |
| Customs duty on gas cylinders for liquefied petroleum gas | 0.0%
|
15.0%
|
15.0% | |
| Customs duty on electric vehicles | 15.0%
|
30.0%
|
30.0% | |
| Customs duty on electric motorbikes | 15.0%
|
25.0%
|
25.0% | |
| Customs duty on bicycles | 15.0%
|
25.0%
|
25.0% | |
| Construction and Infrastructure: Customs duty on Plant, Machinery and Equipment for PPP | 0.0%
|
Removed | ||
| Construction and Infrastructure: Customs duty on Pre-Fabricated Buildings | 0.0%
|
25.0%
|
25.0% | |
| ICT and Telecommunications Equipment | 0.0%
|
25.0%
|
Suspended till 31st December 2025 | |
| Financial Services: Automated Teller Machines (ATMs) | 0.0%
|
15.0%
|
Suspended till 31st December 2023 |
See also
[edit]References
[edit]- ^ a b c d e Price Waterhouse Coopers Zambia (17 April 2022). "Zambia Budget Bulletin 2022" (PDF). pwc.com/zm/en/. Retrieved 17 April 2022.
- ^ a b c d e f g h Deloitte (17 April 2022). "Zambian National Budget Highlights 2022". deloitte.com/za/en/. Retrieved 17 April 2022.
- ^ a b parliament.gov (30 September 2022). "2023 National Budget Speech". parliament.gov.zm. Retrieved 1 October 2022.
- ^ Lusaka Times (31 October 2021). "Zambia Chamber of Mines welcomes 2022 Budget". lusakatimes.com. Retrieved 17 April 2022.
- ^ mining.com (30 September 2022). "zambia-plans-mine-tax-concessions-while-trimming-budget-deficit". mining.com. Retrieved 1 October 2022.
- ^ copperbeltkatangamining (4 September 2022). "zambian-govt-awards-mines-more-tax-exemptions". copperbeltkatangamining.com. Retrieved 7 September 2022.
- ^ a b c d e parliament.gov (30 September 2022). "2023 National Budget Speech". parliament.gov.zm. Retrieved 1 October 2022.
- ^ "2024 Budget Highlights - Overview of Tax Changes" (PDF). zra.org.zm. 29 September 2023. Retrieved 30 September 2023.
- ^ Tax Policy Zambia Revenue Authority
- ^ a b lusakatimes (30 September 2022). "erb-hikes-pump-prices-of-petroleum-products". lusakatimes.com. Retrieved 1 October 2022.
- ^ copperbeltkatangamining (28 December 2022). "zambia-scraps-25-import-tax-on-gasoline-into-2023-petroleum-prices-expected-to-fall-back-at-year-end-beyond". copperbeltkatangamining.com. Retrieved 1 January 2023.