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Investment & Legal Framework
sponsible for the formulation of the country’s tax policy,
and the implementing agency is the Zambia Revenue
Authority (ZRA). The legislative framework relating to
the regulation and administration of the tax system
is provided in the Income Tax Act, 1966. The exact
amount an individual pays in taxes is based on one’s
income and home of residence.
The tax year runs from 1 January to 31 December.
Taxpayers are generally expected to adopt 31 March
as their accounting date, and ZRA’s prior approval is
required for taxpayers to adopt a different accounting
date. Any change in the accounting date also requires
prior approval from ZRA.
The ZRA requires taxpayers to submit annual tax re-
turns—including accounts and supporting schedules—
on or before 30 September. There are penalties for late
submission of tax returns on or before the stipulated
date.
The principal taxes include direct taxes, customs and
excise duties, the value added tax (VAT), property
transfer taxes, and mineral royalties (Mines and Miner-
als Act, 1995).
Corporate Tax
The Zambia Revenue Authority levies corporate taxes
at the rate of 35%. 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 Exchange are taxed at the rate of
33%. Banks with incomes in excess of K250 million are
levied a corporate tax at the rate of 40%.
Personal
Income Tax
This tax is levied in the range of 25-35%. The maxi-
mum rate applicable to farmers is 15%.
Employers are required to register and operate a Pay-
As-You-Earn (PAYE) scheme under which they are re-
quired to deduct the appropriate tax from the sala-
ries of its employees. They must then remit the tax
to the Zambia Revenue Authority.
Doubl
e Taxation Ag
reements
Some eligible taxpayers find themselves liable to
be taxed in more than one country or territory. The
predicament of international double taxation can
adversely affect the international flow and mobil-
ity of human, financial, and investment resources;
therefore, the international community has de-
vised a mechanism to mitigate the incidence of
double taxation.
The countries that Zambia has signed Double Tax-
ation Agreements include the following: Canada,
Denmark, Finland, France, Germany, Holland,
India, Ireland, Italy, Japan, Kenya, Mauritius, Nor-
way, Romania, South Africa, Sweden, Tanzania,
Uganda, United Kingdom, Yugoslavia, and Zim-
babwe.
INVESTMENT CLIMATE
The Zambia Development Act assures investors
that property rights are respected. No investment
of any kind can be expropriated unless the Parlia-
ment has passed an act relating to the compul-
sory acquisition of that property. Also, in case of
expropriation, full compensation shall be made at
market value and shall be convertible at the cur-
rent exchange rate.
In addition to being a member of a number of in-
ternational agreements, Zambia is part of the Mul-
tilateral Investment Guarantee Agency (MIGA) of
the World Bank. This guarantees foreign invest-
ment protection in cases of war, strife, disasters,
etc.
Corporate Tax Rate
Normal
Tax
Rate
Bank
s w
ith income
ov
er K2
5
0
mil
l
ion
Lusak
a Stock
Exchang
e
companies
Ag
ricul
tural
companies
3
5
%
40%
33%
15%
Personal
Income Tax Rate
Normal
Tax Rate
Farmers exemption
2
5
%
- 3
5
%
15% maximum
