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Zambia 2019 budget

Zambia 2019 budget

A summary of the Zambia National Budget 2019


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Mining Truck

Under the 2019 National Budget theme of “Delivering Fiscal Consolidation for Sustainable and Inclusive Growth” the introduction of sales tax, abolishment of Value Added Tax, significant change to the mining tax regime and Government expenditure of ZMW 86.8 billion were some of the key pronouncements made by Honourable Margaret Mwanakatwe, in her inaugural budget speech as Minister of Finance.   Government plans to finance over two thirds of the budget through the collection of domestic revenues and over thirty percent through domestic and foreign debt. 

“It is a budget that seeks to progressively reduce the fiscal deficit, maintain a sustainable debt position and safeguard the vulnerable of our society.

- Honourable Margaret Mwanakatwe, Minister of Finance

Notable economic highlights include:

  • Government proposes expenditure of ZMW 86.8 billion (28.9% of GDP) in 2019
  • Government proposes domestic revenue measures which are expected to raise ZMW 56.1 billion.  The domestic revenue will be raised as follows: Income Tax – ZMW 23.3. billion, VAT- ZMW14.9 billion, Customs and Excise duty -  ZMW 8.4 billion, non-tax revenue ZMW 9.1 billion and other revenue – ZMW 391 million
  • Sustain inflation within the range of 6% to 8%
  • Target annual GDP growth of at least 4%
  • Raise international reserves to at least three months import cover
  • Ease the pace of debt accumulation to ensure its sustainability

Proposed key tax changes include:

  • Reintroduction of Sales Tax and abolishment of Value Added Tax regime
  • Revision of Mineral Royalty Tax rates and tax base
  • Thin Capitalisation Rules for the Mining industry will be replaced with new rules based on Earnings before Interest, Taxes, Depreciation and Amortisation (EBITDA)
  • Statute of limitation requirements to retain records for Transfer Pricing purposes increased to 10 years from 6 years
  • Increase in penalty for non-compliance with Transfer Pricing Regulations from ZMW3,000 to ZMW24,000,000
  • Revision of Turnover Tax regime by re-introduction of a flat rate of 4% on business turnover below ZMW800,000
  • Increase in Withholding Tax rate on dividends, interest and branch profits from 15% to 20%
  • New tax regime on casino, lottery, betting and gaming activities introduced
  • Customs duty rebates on the construction of shopping malls will be scrapped

Download our detailed 2019 National Budget Highlights here.

© 2020 KPMG Zambia Ltd, a Zambian company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

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