Zambia

Value-added tax (VAT)

Zambia's VAT system operates at a standard rate of 16% on most goods and services. Notably, goods and services exported from Zambia are typically zero-rated, with the exception of services physically performed in Zambia, which are taxed at the standard rate regardless of the customer's residency.

Imported standard-rated goods are also subject to the 16% VAT upon entry into Zambia. For services supplied to Zambian customers by non-resident providers, where the services have not been taxed in the originating country, Zambian VAT applies. In such cases, the Zambian customer must account for the output VAT through a reverse-charge mechanism but is initially unable to reclaim the input VAT.

To facilitate input VAT recovery for Zambian customers receiving services from abroad, the foreign supplier may appoint a local tax agent. This agent is responsible for managing output VAT and issuing Zambian tax invoices, enabling the customer to claim input VAT credits.

Customs duties

In Zambia, imported goods attract customs duties, which are levied to regulate the flow of goods into the country. The customs duty rates vary depending on the classification of the goods under the Harmonized System codes.

Excise taxes

The Zambian tax regime imposes excise taxes on specific goods and services. These include, but are not limited to, alcoholic beverages, tobacco products, and mobile communication services. The excise duty rates are predetermined and applied to those goods or services to discourage excessive consumption and/or generate revenue for the government.

It is important for businesses and individuals engaging in the importation of goods or dealing in excisable products and services to be aware of these tax obligations to ensure compliance with Zambian tax laws. Exercisable goods and services are subject to excise duty at the following rates:

* Airtime includes minutes of voice calls, short message services (sms), multi-media services (mms), Internet bandwidth, and other similar services that a subscriber consumes on a mobile cellular telephone or other electronic communication device.

Property Transfer Tax (PTT)

Zambia imposes PTT on certain property transactions. The PTT is levied on the following:

• The transfer of Zambian land.
• Intellectual property (IP) rights.
• Mining rights and interests therein.
• Mineral processing licences and other mining-related licences.
• Share transfers in Zambian-incorporated companies.

Notably, PTT also applies to indirect share transfers. This occurs when a non-resident company, holding a minimum of 10% in a Zambian company, undergoes a share transfer.

PTT rates

Effective from 1 January 2025, the following PTT rates apply:

PTT is charged on the transfer of specified property and is computed on the realised value as prescribed in the PTT Act. 

*N.B - Where a non‑resident transfers shares in a company incorporated outside Zambia that directly or indirectly owns at least 10% of a company incorporated in Zambia, PTT at the rate applicable to shares applies to the realised value computed using the statutory proportional tests. 

Stamp taxes

There is no stamp tax in Zambia. However, effective 1 January 2023, the Patents and Companies Registration Agency (PACRA) has reduced the fees levied on the increase in authorised share capital of a company incorporated in Zambia to 1.5% (previously 2.5%) of the nominal value of the share capital. 

The minimum prescribed fees at initial registration of a company will vary according to the specific type of company being incorporated. The following are the minimum prescribed fees:

However, the total fee shall not exceed ZMW 3,333,333. For a company limited by guarantee, the guaranteed amount shall not be less than ZMW 20,000.

Mobile money transaction levy

The Mobile Money Transaction Levy Act, 2024, effective from 1 January 2025, instituted modifications to the regulation and administration of the mobile money transaction levy. The Act now appoints the ZRA as the primary authority for levy administration.  

Under this regulatory framework: 

• Mobile money service providers are required to remit the total levies collected for each month directly to the ZRA within ten days following the end of each month. 
• The Bank of Zambia (BoZ) is obligated to transfer all records, returns, or documents pertaining to previously collected levies to the ZRA. 
• The Commissioner-General of the ZRA has enforcement powers as stipulated under the Zambia Revenue Authority Act and the Income Tax Act.

Revised Rates 

Effective 1 January 2026, The Mobile Money Transactions Levy Act, 2024 was amended specifically to increase the initial levy rates that were imposed in the first publishing of the Act.

The updated rates are as follows; 

Presumptive taxations for motor vehicles used for the carriage of persons

The bands for presumptive taxes for motor vehicles used for the carriage of persons have been amended as follows: 

Turnover taxes

Entities with annual turnovers not exceeding ZMW 5 million are subject to a 5% turnover tax rate effective 1 January 2025. This tax is exclusive of income tax.

Turnover, for this purpose, does not include interest, dividends, royalties, consultancy services income, or income from standard mining operations.

The threshold for artisanal and small-scale mining activities remains unchanged at ZMW 800,000.

Gig economy and rental income 

Individuals in the gig economy earning up to ZMW 12,000 annually are exempt from turnover tax. Those with incomes between ZMW 12,000 and ZMW 5 million are taxed at 5% effective 1 January 2025.

The charging schedule has been amended to revise the turnover rates applicable to a person or partnership deriving income from the letting of property as follows: 

• 0% per annum on turnover that does not exceed ZMW 30,000; 

• 4%per annum on turnover between ZMW 30,000 and ZMW 800,000; and 

• 16% per annum on turnover that exceeds ZMW 800,000. 

Rental income earners must file monthly rental income tax returns by the 14th day of the following month. All taxpayers receiving rental income must register for rental income tax and comply with the same monthly payment deadline for submitted returns.

Payroll taxes 

Employers in Zambia must deduct income tax from employee emoluments under the Pay-As-You-Earn (PAYE) system, which applies progressive personal income tax (PIT) rates.

Skills Development Levy (SDL) 

A mandatory monthly levy of 0.5% is imposed on employers, calculated on the gross emoluments of their employees.

Social security contributions 

Both employers and employees contribute to the National Pension Scheme Authority (NAPSA). The combined contribution rate is 10% of an employee's earnings, capped at ZMW 3,723.60 monthly (ZMW 1,861.80 each) for the 2026 charge year. 

National Health Insurance contributions 

The National Health Insurance Scheme mandates a 1% contribution from both employers and employees, based on the employee's basic salary, totalling a 2% contribution.

Provincial/local taxes other than income taxes

Employers may be subject to additional levies by local councils, such as the Lusaka City Council.