TAXATION CHANGES: 2015 BUDGET GETS INTO EFFECT

A view as you enters Lusaka's central Business District
Opening doors to the year 2015 are several changes in Zambia’s taxation system.
As the new national budget gets into effect, changes to the mining tax regime area the most prominent.
One adjustment is the increase in the mineral royalty tax for underground mining operations from six percent to eight percent and for open cast mining operations from six percent to 20 percent, as final tax.
The mining sector will also see a 30 percent company tax on mining income earned from tolling operations while corporate income tax on income earned from processing of purchased mineral ores, concentrates.
These changes have already received some sharp reactions from the mining companies and other stakeholders on the negative effects of the mining tax regime. Other mines have vowed to suspend operations if nothing changes.
But government has maintained that the upward changes will enhance the country's revenue base but at the time welcoming dialogue.
The expected additional revenues, in 2015, as a result of the new measures are estimated at k1.7 billion.
Another change is the presumptive tax for individual operators of public service vehicles. This law introduced in 2004 taxes specific amounts based on vehicle sitting capacity, but remained unadjusted in the last ten years and have consequently been eroded by inflation.
2015 comes with a 100% rise to presumptive tax payable by these operators.
This means that a 17 seater bus will now be paying 200 from 100 kwacha per month, while a 64 seater bus will be paying 1200 from 600 kwacha per month, with expected additional revenue of about k3.8 million from this measure.
Another change in the new year is an increase on the specific duty rate on refined edible oil to k2.20 per kilogram from 85 ngwee per kilogram in order to bring it at par with the ad valorem rate of 25 percent charged on imported refined edible oil.
In order to stimulate the local manufacturing industry and sustain employment in the sector, there is an increase in customs duty on explosives to 25 percent and on roofing sheets to 30 percent. 

Excise duty on imported spirits of alcoholic content of 80 percent or higher by volume to 125 percent from 0 percent is another issue that gets effect. The measure will only apply to importers who are not licensed to manufacture excisable products while the licensed manufacturers will continue to account for excise duty at the point of sale of the manufactured potable spirits at the current excise duty rate of 60 percent.
The combined revenue gain from these last three measures relating to changes in customs and excise duties is estimated at k40 million.
The 5 percent customs duty on aviation fuel was removed in order to reduce costs in the aviation industry. This measure, together with the expansion of our international airports, are some of the practical steps government is taking to make Zambia a regional hub for air traffic. As a result of this measure government will fore-go k6.3 million in revenue.


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