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Investment & Legal Framework
The Income Tax Act requires every person (embrac-
ing every business entity, enterprise or individual)
receiving income liable to tax under the Act to no-
tify the ZRA, in writing, accordingly within thirty (30)
days from the date of first receiving such income and
the Act also provides for penalties for failure to give
the necessary notice.
The tax year (charge year) runs from 1st January
to 31st December of the following year. Taxpayers
are generally expected to adopt the 31st March as
the accounting date and ZRA’s prior approval is re-
quired if the taxpayer proposes to adopt a different
accounting date. Any change in the accounting date
also requires prior approval from ZRA.
The ZRA requires that annual tax returns including
accounts and supporting schedules are submitted
on or before 30th September in respect of the tax
year ended 31st March of the same calendar year.
There are penalties for late submission of tax returns
on or before stipulated date.
The principal taxes include direct taxes (notably
corporate tax, Pay-As-You-Earn, other personal
income), Customs and Excise duties, Value Added
Tax (VAT), property transfer tax and mineral royalty
(Mines and Minerals Act 1995).
Corporate Tax
The Zambia Revenue Authority levies corporate
tax at the rate of 35%. However, income from the
agricultural sector and non-traditional exports (all
exports except copper and cobalt) is levied at 15%,
while companies listed on the Lusaka Stock Ex-
change are taxed at the rate of 33%. Banks with in-
come in excess of K250 million are levied corporate
tax at the rate of 40%.
Personal Income Tax
Personal income tax is levied in the range of 25-35
%. The maximum rate applicable to farmers is 15 %.
Employers are required to register and operate a
Pay-As-you-Earn (PAYE) scheme under which they
are required to deduct the appropriate tax from the
emoluments of liable employees and remit the tax
to the Zambia Revenue Authority. The employer is
under a legal obligation to deduct such tax and remit
it to ZRA.
Emoluments paid or payable to an expatriate em-
ployee for work performed, carried out or for services
rendered in respect of his employment in Zambia are
liable to tax and should be subjected to deduction
of PAYE, notwithstanding the fact that such emolu-
ments are paid or payable outside Zambia or are
paid or payable by a person who resides outside of
Zambia.
Employers are further required to submit annual
PAYE tax returns, at the end of every charge year,
on a prescribed ZRA form.
Double Taxation Agreements
Some eligible taxpayers find themselves liable to tax
in more than one country or territory in respect of the
same income. The predicament of international Dou-
ble Taxation may adversely affect the international
flow and mobility of human, financial and investment
resources, thus the international community has de-
vised a mechanism to prevent, eliminate or mitigate
the incidence of Double Taxation.
The countries that Zambia has signed Double Taxa-
tion Agreements with include Canada, Denmark,
Finland, France, Germany, Holland, India, Ireland,
Italy, Japan, Kenya, Mauritius, Norway, Romania,
South Africa, Sweden, Tanzania, Uganda, United
Kingdom, Yugoslavia and Zimbabwe. In principle,
double taxation agreements enable offsetting tax
paid in one of 2 countries against the tax payable
in the other, in this way preventing double taxation.
Chembe Bridge Construction, an example of the large-scale
infrastructure developments taking place throughout the
country