Zambia

Zambia's tax system is predominantly source-based, with income generated from Zambian sources being liable for income tax. For Zambian tax residents, the tax scope extends to global interest and dividend income, aligning with a worldwide taxation principle.

Non-resident entities operating through a permanent establishment (PE) in Zambia are subject to corporate income tax (CIT) on the income attributable to their Zambian PE. In the absence of a PE, non-resident income from Zambian sources may incur WHT, typically withheld at the source (see the Withholding taxes section).

The standard CIT rate is 30% on taxable corporate income. However, as of 1 January 2023, the telecommunications sector's dual tax rate system has been streamlined to a uniform rate of 35%, replacing the previous structure of 30% on income up to ZMW 250,000 and 40% on income exceeding this threshold.

For small businesses unable to maintain detailed records for tax assessment, a base tax of ZMW 365 per annum is levied, which is common among market traders. Specific income sources may be taxed at varying CIT rates.

The following sources of income are subject to different CIT rates:

The rates applicable for mining operations (for both base metals and industrial minerals) are as follows:

Income earned solely from mineral processing is subject to CIT at a rate of 30% (4).

Notes

1. Non-traditional products refer to anything produced or manufactured in the Republic, excluding minerals, electricity, services, or cotton lint exported without an export permit from the Minister of Commerce.
2. Mining operations means an operation carried out under a mining right, excluding an operation carried out under a mineral processing licence only, or an exploration licence.
3. Industrial minerals include rocks or minerals other than gemstones, base metals, energy minerals, or precious metals used in their natural state or after physical or chemical transformation, including barytes, dolomite, feldspar, fluorspar, graphite, gypsum, ironstone when used as a fluxing agent, kyanite, limestone, phyllite, magnesite, mica, nitrate, phosphate, pyrophyllite, salt, sand, clay, talc, laterite, gravel, potash, potassium minerals, granite, marble, clay, silica, diatomite, kaolin, bentonite, or quartz.
4. Mineral processing means the practice of beneficiating or liberating valuable minerals from their ores, which may combine a number of unit operations, such as crushing, grinding, sizing, screening, classification, washing, froth floatation, gravity concentration, electrostatic separation, magnetic separation, leaching, smelting, refining, calcining, and gasification or any other processes incidental thereto.

Reduced CIT rates apply in some other cases, including for certain companies listed on the Lusaka Securities Exchange.

Mineral royalty tax

The mineral royalty tax regime in Zambia has undergone a number of changes since 2015. However, with effect from 1 January 2023, the following mineral royalty tax rates apply:

From 1 January 2022, the mineral royalty tax is deductible in determining the taxable income of a mining company.

Local income taxes

There are no income taxes imposed by the provincial or local authorities on businesses.