Zambia 2019 Budget Speech Explained

Zambia’s annual budget was presented to Parliament on September 2019 and the links below are BDO Zambia’s summary of tax rates and budget commentary.

Some measures that will affect foreign investors (mostly negatively) include the following:

• Mineral royalties are now non-deductible from taxable income and rates have been increased by 1.5%
• Withholding ta rates on interest, dividends and branch profits are increased from 15% to 20% (subject to tax treaty relief, if applicable)
• Thin capitalisation limit on interest deductions exceeding 30% of EBITDA introduced
• It has been proposed that the VAT system be replaced by a Sales Tax where no input credits will be allowed”

Most measures are effective from 1 January 2019, but the Sales Tax is proposed to be introduced on 1 April 2019.

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