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The Sales Tax Bill’s main objectives are to Where the taxable supplier exceeds the
introduce a Sales Tax on the supply of goods and prescribed registration threshold, the ZRA will
services; and to repeal and replace the Value have the power to register the supplier for Sales
Added Tax Act, 1995. Tax whether the supplier has applied for
registration or not.
Scope of Sales Tax
Valuation for Sales Tax purposes
Sales Tax will be levied on the supply of any
taxable goods or services made by a taxable For purposes of determining the value on which
supplier in the course or furtherance of the Sales Tax is calculated, the Sales Tax Bill
business that takes place in Zambia. It will also provides that:
apply on the importation of goods and services
as well as the export of goods that do not meet On importation of goods, Sales Tax will
documentation requirements yet to be apply on the value for duty purposes
For detailed information plus any duties payable (e.g., Customs
please contact:
prescribed. Sale Tax will not apply on goods and
services to be outlined in an Exemption List to be and Excise Duties were applicable).
Jyoti Mistry issued by the Minister of Finance by way of Sales Tax is applicable regardless of
jyoti.mistry@pwc.com Statutory Instrument (further details below). whether or not customs duty is payable;
Tel: +260 211 334000 On goods manufactured in Zambia,
Cell: +260 77740641 Sales Tax will apply on the higher of the
Sales Tax Rates open market price, factory cost or
Lydia Pwadura selling price;
lydia.g.pwadura@pwc.com Sales Tax will be levied on the taxable value of On goods supplied by other suppliers,
Tel: +260 211 334000 supplies at the following rates: Sales Tax will apply on the open market
Cell: +260 963874779 value; and
Rate On supply of services, Sales Tax will
Emmanuel Chulu Supply of goods and services in 9% apply on the value or price of the
emmanuel.e.chulu@pwc.co Zambia services provided including any
m incidental services (i.e. disbursements
Importation of goods and 16%
Tel: +260 211 334000 incurred in providing the services).
services
Cell: +260 977240282
The Bill empowers the Minister to lower the Note: Services provided without consideration
George Chitwa (that is to say for no charge) will not be subject
George.chitwa@pwc.com rates above by way of Statutory Instrument.
to Sales Tax except as the Minister prescribes by
Tel: +260 211 334000 way of Statutory Instrument.
Cell: +260 971027555 Who is required to account for Sales Tax?
The Bill provides for the following general offences We summarise below the transitional
that are subject to a fine not exceeding 300,000 provisions included in the Sales Tax Bill:
penalty units (K90,000) and/or imprisonment for a
period not exceeding 3 years: A supplier registered under the VAT
Act and who meets the registration
Knowingly or negligently providing false or requirement under the Bill will be
misleading information; required to register for Sales Tax
Taking steps to evade or fraudulently claim Accrued VAT credits will be
tax; refundable to taxpayers. However,
Failure to furnish the ZRA with information prior to payment of the refunds the
within the time specified in the final Act; ZRA may offset any refundable
Failure to maintain records or documents amounts against any outstanding tax
required under the final Act; liabilities that the taxpayer may have.
Failure without just cause to attend at a Records required to be kept under
time and place in accordance with the VAT Act for a specified period
requirements of a notice served; shall continue to be kept as if
Delays, assault, obstructs, hinders an prescribed by the Bill for the
authorized officer to perform their duty; unexpired residue of the period.
Refusal to give authorized officers The ZRA can still conduct VAT audits
information or assistance required for an and assessments following the repeal
investigation; or of the VAT Act for periods in which
Impersonation of authorized officers under the VAT Act was applicable.
the final Act or false representation of
oneself to an authorized officer. Effective date of commencement
Recovery of tax Please note that the Sales Tax Bill is subject to
approval by Parliament. Following which the
The Bill provides for the tax due but not Minister through a statutory instrument will
paid to be recoverable in any court, by an indicate the effective date of the legislation.
attachment of debt, a charge on land or
under distress. The Minister of Finance has tentatively
The tax chargeable on a supply of goods or indicated that Sales Tax will be effective from
services shall be recoverable from the 1 July 2019.
person issuing the invoice.
This publication has been prepared as general information on matters of interest only, and does not constitute
professional advice. You should not act upon the information contained in this publication without obtaining specific
professional advice.
© 2019 PricewaterhouseCoopers Limited. All rights reserved. In this document, “PwC” refers to
PricewaterhouseCoopers Limited which is a member firm of PricewaterhouseCoopers International Limited, each
member firm of which is a separate legal entity.