1. ZAMBIA REVENUE AUTHORITY
ZAMBIAN TAX REGIME APPLICABLE TO LAWYERS & LAW FIRMS
A Presentation to the LAZ 2018 AGM by
Moses Shuko
Power, Privilege & the pursuit of Justice: Legal Challenges in Precarious Times

2. Presentation Outline - Income tax Introduction
Zambian Tax Regime in General
- Income tax
- Withholding Tax
- Property Transfer Tax
- Value Added Tax
- Customs and Excise Duty
Taxes applicable to lawyers and law firms
4. Current Tax Compliance levels
5. The way forward
Power, Privilege & the pursuit of Justice: Legal Challenges in Precarious Times

3. INTRODUCTION
“Taxation is the price which civilised communities pay for the opportunity of remaining civilised” Albert Bushnell Hart
“ Taxes are the lifeblood of government and no taxpayer should be permitted to escape the payment of his just share of the burden of contributing thereto” Arthur Vanderbilt
Tax justice is ensuring that all companies and individuals pay the
right amount of tax at the right time.
Power, Privilege & the pursuit of Justice: Legal Challenges in Precarious Times

4. INCOME TAX
The Income tax is administered under the Income Tax Act Chapter 323 of the Laws of Zambia
Income in Zambia is taxed on the basis of the source principle.
Residents are taxed on income that has a source within the Republic and on certain types of foreign income that are deemed to have a source within the Republic
Non residents are taxed on income that has a
source within the Republic
Power, Privilege & the pursuit of Justice: Legal Challenges in Precarious Times

5. INCOME TAX Cont’d
The income taxes comprises of four tax types (i) company income tax (ii) personal income tax (iii) withholding taxes (iv) presumptive taxes
Power, Privilege & the pursuit of Justice: Legal Challenges in Precarious Times

6. Company Income Tax
This is a tax charged on profits and gains earned by limited companies.
The general company tax rate is 35%
For companies involved in agriculture, manufacture of chemical fertilizer and non-traditional exports, the rate is 15%
Power, Privilege & the pursuit of Justice: Legal Challenges in Precarious Times

7. Personal Income Tax
This is a tax charged on income earned by individuals.
It is taxed at graduated rates ranging from 0 percent for incomes of K39,600 per annum and below and the balance at graduated rates of 25 percent, 30 percent and 37.5 percent
Power, Privilege & the pursuit of Justice: Legal Challenges in Precarious Times

8. Personal Income Tax cont’
Note on Partnership Taxation
Partners share business profits from the partnership using the Sharing Ratios and these profits are taxed separately on the individual partners
The Income tax bands are used in computing tax payable for each partner.
Power, Privilege & the pursuit of Justice: Legal Challenges in Precarious Times

9. Withholding Taxes
This is a 15% tax withheld by the payer before making certain payments.
Interest
Dividends
Commissions
Management and consultancy fees
Rents (10%)
Royalties (R-15%/NR-20%)
Non resident contractors (20%)
Power, Privilege & the pursuit of Justice: Legal Challenges in Precarious Times

10. Property Transfer Tax This tax is administered under the Property
Transfer Tax Act Chapter 340 of the Laws of
Zambia.
Property transfer tax is charged at the rate of 5 percent of the open market value realised from the sale of any land, building or shares issued by any company incorporated in Zambia.
Mining right or an interest in the mining right 10%
Power, Privilege & the pursuit of Justice: Legal Challenges in Precarious Times

11. Value Added Tax
This tax is administered under the Value Added Tax Act Chapter 331 of the Laws of Zambia
Value Added Tax is a consumption-based tax that is levied in the supply chain at each point were value is added to a good or service.
VAT is charged at the standard rate of 16 percent on all goods and services apart from those listed in the exempt and zero rated schedules.
Power, Privilege & the pursuit of Justice: Legal Challenges in Precarious Times

12. Value Added Tax Cont’
Exempt goods include agricultural product, books and newspaper etc.
Zero rated good include exports mosquito nets, packaged
tours etc.
Power, Privilege & the pursuit of Justice: Legal Challenges in Precarious Times

13. CUSTOMS AND EXCISE
These taxes are administered under the Customs & Excise Act Chapter 322 of the Laws of Zambia
Import duties on imports at the varied rates of zero percent for capital and basic raw materials, 5 percent for other raw materials and equipment, 15 percent for intermediate goods and 25 percent for finished goods are charged
Power, Privilege & the pursuit of Justice: Legal Challenges in Precarious Times

14. CUSTOMS AND EXCISE Cont’
Excise duties on goods such as petroleum products, selected motor vehicles, beer and liquor, spirits, cigarettes and carbonated drinks are levied
Power, Privilege & the pursuit of Justice: Legal Challenges in Precarious Times

15. Taxes applicable to Lawyers &Law Firms
Customs & Excise – on imports & excisable goods
Income Tax – For purposes of filling the returns
Personal Income Tax – For partners & employees
Value Added Tax – On all taxable supplies
Power, Privilege & the pursuit of Justice: Legal Challenges in Precarious Times

16. Taxes applicable to Lawyers & Law Firms
Withholding Tax – on legal services & rentals
Property Transfer Tax – as agents and own right
Turnover Tax – Firms excluded as partnerships & lawyers by virtue of services offered
Power, Privilege & the pursuit of Justice: Legal Challenges in Precarious Times

17. Return filling Compliance for legal entities 2017
Power, Privilege & the pursuit of Justice: Legal Challenges in Precarious Times

18. Payment Compliance for legal firms in 2017
Power, Privilege & the pursuit of Justice: Legal Challenges in Precarious Times

19. THE WAY FORWARD FOR LAWYERS & LEGAL FIRMS
Timely registration for all applicable taxes
Timely filling of tax returns
Timely Payment tax
Well maintained accounting records up to 6 years
Power, Privilege & the pursuit of Justice: Legal Challenges in Precarious Times

20. THE WAY FORWARD FOR LAWYERS & LEGAL FIRMS
Correct and complete declarations
Timely provision of information & updates on partnership changes
Voluntary Self - Disclosures
Timely application for deregistration upon
winding up of business
Power, Privilege & the pursuit of Justice: Legal Challenges in Precarious Times

21. END OF PRESENTATION Luke 20:25
He said to them, “Then give back to Caesar what is Caesar’s, and to God what is God’s”
Power, Privilege & the pursuit of Justice: Legal Challenges in Precarious Times