Tax Regime in Zambia- Information for Investment Clubs in Zambia

 Income Tax

Income tax in Zambia is chargeable pursuant to the provisions of the Income Tax Act, Cap. 323 (ITA). Personal income tax is paid by people resident or deemed to be resident in Zambia. Pay As You Earn is the method for collection of income tax from persons who are gainfully employed as the employer is required to deduct the tax from the individual’s salary or wages and remit the same to the ZRA. In addition, income tax is charged directly on profits made by corporate bodies such as limited liability companies and trusts. Therefore, businesses are subject to corporate income tax on trading profits and other taxable income such as interest, royalties and rental income. 

In general, expenses and losses of a revenue nature that are wholly and exclusively incurred for the purpose of the businesss are allowable as deductions. For other sources, to be deductible, expenses must have been incurred wholly and exclusively in the production of the income from that source. The ITA sets out the matters to be considered in the determination of taxable income and also sets out the rates of taxation. The rates do not differ between resident and non-resident entities.

The corporate income tax rates are currently at 35%. It is worth noting that a 1 year 2% discount is granted to newly listed Companies on LuSE.

Withholding Tax

Withholding tax is payable on dividends, interest, royalties and management fees.

Property Transfer Tax

This is a type of tax imposed by virtue of the Property Transfer Tax Act, Cap. 340. The rate of property transfer tax according to the Act is charged at ten per cent (10%) of the realised value of the property

Double Taxation Arrangements

Zambia has double taxation relief agreements with Canada, Denmark, Finland, France, Germany, Holland, Ireland, Italy, Japan, Kenya, Mauritius, Romania, South Africa, Sweden, Tanzania, Uganda, the United Kingdom, Norway, Zimbabwe and India (please note that the agreements with the last three states have not yet been ratified).

ZANAICA is promoted and hosted by Twende, an on-demand platform and Zambia’s first superapp, that also offers motorcycles (bodabodas) and tricycles (tuktuks), on lease to own, hire purchase model. Twende promotes investment clubs as an initiative to promote savings and investment culture in Zambia. To get free investment club training, do not hesitate to contact us on facebook at https://wa.me/+254103242604, or https://chat.whatsapp.com/HNosGG0OmdWHvXnFHVSLoh or email us at zanaica@twende.store or visit Twende offices at Manda Hill, Plot 271/C.

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