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Zambia: Tax measures in budget 2019

Zambia: Tax measures in budget 2019

Zambia’s budget 2019 includes tax measures that generally are proposed to be effective 1 January 2019.

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Some of the proposals are targeted to provide relief for certain industries. For instance, among the tax provisions are measures that would reduce the corporate income tax rate from 35% to 15% for companies that add value to copper cathodes. Other measures would impose a 15% rate of export customs duty for exports of precious metals and gemstones and for exports of manganese ores and concentrates, and would impose a 5% rate of import customs duty on copper and cobalt concentrates. 

A general “thin capitalisation” measure would limit the amount of deductible interest to 30% of “earnings before interest, tax, depreciation and amortisation” (EBITDA) for purposes of the company tax (in other words, a debt-to-equity ratio of 3:1).

The government has proposed to repeal the value added tax (VAT) regime and replace it with a sales tax (effective 1 April 2019). Details were not provided with the budget 2019.

 

Read an October 2018 report [PDF 1.1 MB] prepared by the KPMG member firm in Zambia

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