Zambia

Individual - Other issues

Last reviewed - 17 May 2024

Treatment of flow-through business entities

Where a business is carried on in partnership, the income to which each partner is entitled in a period is ascertained under the Zambian income tax rules, and each partner is assessed and charged accordingly. A partnership is therefore broadly transparent for Zambian income tax purposes.

Exchange controls

Regulations requiring the monitoring of cross border and foreign currency transactions were abolished in March 2014. 

Regulations that required local transactions to be negotiated and based in the local currency, kwacha, were also abolished.

However,  the Government through the Bank of Zambia (“BoZ”) recently developed an Electronic Export Proceeds Tracking Framework. This is intended to facilitate real-time monitoring and reporting between the regulatory authorities.

The Bank of Zambia further issued the (Export Proceeds Tracking Framework) Directives in 2023 as subsidiary legislation to govern the implementation of the framework. The Directives became effective on 1 January 2024.

The framework highlights that all exporters are required to complete and submit the customs export declaration Form CE 20 to the ZRA with a unique identification number called the Unique Consignment Reference (“UCR”). 

In addition to the above, all exporters will be required to open and maintain accounts with commercial banks or financial institutions domiciled in Zambia. This entails that all the earnings derived from the export of goods and/or services would be required to be reflected in the said bank account within 90 days of the export.

Commercial banks and financial institutions that receive the export proceeds are required to notify the BoZ by way of submitting returns of all money  and remittances received to the  BoZ. The returns submitted should provide the Taxpayer Identification Numbers, details of receipts and utilisation of funds and correct use of UCRs.

Once the above procedures have been completed, the BoZ will be responsible for the following:

  • Reconciliation of the UCRs (as recorded by ZRA by using the ASYCUDA system) and the eBoP returns submitted by commercial banks and financial institutions;
  • Follow up unreconciled UCRs
  • Preparation of International Investment Position; and 
  • Stakeholder sensitisation.