Taxes in Zambia

Zambia uses direct taxes such as personal income tax, PAYE, corporate income tax, withholding tax, rental income tax, turnover tax, presumptive tax, mineral royalty and base tax. Indirect taxes include Value Added Tax (VAT) and excise duty, while customs duty, import VAT, export duty and the carbon emission surtax apply to relevant cross-border goods. Other statutory levies include the Insurance Premium Levy, Skills Development Levy, Mobile Money Transaction Levy and Betting Levy. The Zambia Revenue Authority (ZRA) is the national tax administration. The Ministry of Finance and National Planning leads tax policy, Parliament enacts tax legislation, and the Tax Appeals Tribunal (TAT) hears appeals after the administrative review stage. There is no established provincial tax administration that replaces ZRA for the main national taxes, although local authorities or other offices may be involved in property and transfer documentation. A Taxpayer Identification Number (TPIN) identifies a taxpayer in the ZRA system. Companies, partnerships, individuals, NGOs, clubs, associations, missionary bodies and other entities that fall within the registration rules apply through ZRA or TaxOnline and should keep their contact and address details current. Registration does not itself remove a tax liability when a person or entity has failed to register. TaxOnline supports registration and electronic returns. Taxpayers can generally pay through electronic payment channels, banks or mobile money. Smart Invoice transmits electronic invoice and transaction data to ZRA; it applies to VAT-registered businesses from 1 October 2024. Available Smart Invoice arrangements include desktop or tablet tools, an online option, mobile use for Turnover Tax and certified ERP or accounting integrations through a Virtual Sales Data Controller (VSDC). For employment income, PAYE is deducted from emoluments such as wages, salaries, overtime, leave pay, commissions, bonuses and taxable benefits in kind. In 2026, the monthly bands are 0% up to K5,100, 20% from K5,100.01 to K7,100, 30% from K7,100.01 to K9,200 and 37% above K9,200. The employer calculates and deducts PAYE, submits the ITF or P16 return and pays it by the 10th day of the following month. Local employees of foreign missions and international organisations are generally taxable, although PAYE Direct may apply in some cases. A company is generally taxed on taxable profit, calculated from income after allowable expenses, with disallowable expenses added back. The standard income tax rate is generally 30%, while agriculture is taxed at 10%. Companies normally submit a charge-year provisional return by 31 March, make instalment payments on the scheduled dates in March or April, June or July, September or October and December or January, and file the annual return with any balance by 21 June of the following year. A 1% minimum tax based on total turnover can apply under the 2025 income tax amendment, subject to statutory exclusions including Presumptive Tax and Turnover Tax persons and a qualifying railway public-private-partnership special-purpose vehicle during its first 12 years. Turnover Tax is calculated on gross turnover for qualifying small businesses. Annual turnover up to K30,000 is taxed at 0%; turnover above K30,000 and up to K5,000,000 is taxed at 5%; businesses above K5,000,000 generally move to income tax. The monthly electronic return and payment are due by the 14th day of the following month. Partnerships, management or consultancy businesses, certain income subject to final withholding tax and regular mining businesses are among the excluded categories. A business expecting to exceed K5,000,000 should notify the Commissioner General, and a regime change normally takes effect in the following year rather than partway through the year. Presumptive Tax provides a simplified charge for income that is difficult to measure, especially in parts of the informal sector and transport activities. The amount depends on the vehicle or activity category, and the regime typically involves fewer books and returns than ordinary business taxation. Artisanal and small-scale mining have additional rules, so the applicable activity classification must be checked with ZRA. VAT registration is generally required when taxable supplies exceed K800,000 in a year. Voluntary registration may be possible above K400,000 and below K800,000 if the conditions are met. The standard VAT rate is 16%; zero-rated supplies carry 0%, while exempt supplies do not carry VAT. A registered supplier normally accounts for output VAT less recoverable input VAT, and import VAT applies to taxable imports. VAT returns and payments are due by the 18th day of the following month. Withholding Tax (WHT) is a collection method in which the payer withholds tax at the relevant payment point. The tax point is generally the earliest of payment, accrual, becoming due or being made available. Common rates include 15% on dividends paid to residents, 20% on dividends paid to non-residents, 10% on rent, 15% on royalties paid to residents and 20% to non-residents, 15% on resident management or consultancy fees and 15% on resident commissions. Non-resident commissions and contractor payments can attract 20%, subject to applicable rules and double-tax agreement rates. The WHT return and payment are generally due by the 14th day of the following month. Property Transfer Tax is generally paid by the transferor or seller. The rate is 8% for land, buildings and improvements, shares and intellectual property, 10% for a mining or mineral-processing licence and 8% for an exploration licence. The taxable value is generally the higher of market value and the declared value. The return and payment are due within 14 days, and a Tax Clearance Certificate (TCC) may be required after payment. Even an exempt transfer normally requires a return and nil assessment. Group-reorganisation relief can apply from 1 January 2026 where the statutory conditions, including at least three years of group membership, are met. Importers and exporters, sometimes through a licensed clearing agent, may owe customs duty, excise duty and import VAT according to the tariff and the goods. Assessed customs and excise liabilities are generally payable within five days. Mineral royalty is generally due by the 14th day of the following month, local excise by the 15th and the Insurance Premium Levy by the 18th. The Mobile Money Transaction Levy and Betting Levy are generally due by the 10th of the following month. Zambia uses self-assessment, so a submitted return is a legally binding tax declaration. Taxpayers should keep books and supporting records for at least six years. ZRA’s service standards provide 30 days for VAT refunds and 45 days for income tax refunds, although the underlying claim must satisfy the applicable requirements. Certain transactions and licences require a valid TCC, and its status can be checked online. A taxpayer who disputes a Notice of Assessment can submit a written, reasoned objection within 30 days. The Commissioner General reviews the objection and issues a determination; a further appeal can be filed with the TAT within 30 days. An objection or appeal does not automatically suspend the tax or interest, so the payment position must be addressed separately. Taxpayers have rights to information, fair treatment, privacy and official payment confirmation. Late returns, late payments, missing records and Smart Invoice failures can lead to penalties, interest and, in some cases, criminal proceedings. ZRA states that interest is calculated using the Bank of Zambia discount rate plus 2%. Cross-border taxation depends on residence, non-resident status, a permanent establishment, withholding tax, transfer pricing and any applicable double-tax agreement. Related-party transactions should follow the arm’s-length principle and may require supporting documentation. Foreign remittances above US$2,000 can attract 15% Advance Income Tax for taxpayers without a valid TCC. Mining, non-resident contractors, royalties, services, government securities and related-party transactions require particular attention because the applicable rate or filing duty can differ.