Zambia: Finance Minister presents national budget for 2017

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The Minister of Finance has presented national budget for 2017 to the National Assembly on  11th November 2016.

The budget of 2017 highlights some important issues which are given below:

Direct tax     

  • PAYE threshold increased from K3,000 to K3,300;
  • Individual income tax rate increased from 35% to 37.5% ( income band above 74,400 (ZMK);
  • Advance Income Tax increased from 6% to 15%;
  • All statutory bodies required to pay tax on rental income at the rate of 10%;
  • Penalties for late submission of turnover tax returns introduced at the rate of 500 penalty units (K150) per month or part of the month;
  • Capital allowances for plant, equipment and machinery used in farming and agro processing to increase from 50% to 100%;
  • Skills development levied at a rate of 0.5% on the total emoluments paid by an employer.

The macroeconomic objectives:

  • Attain real GDP growth of at least 3.4%;
  • Retain domestic borrowing up to 2% of GDP;
  • Limit the overall fiscal deficit up to 7.0% of GDP, based on cash;
  • Attain domestic revenue mobilisation of at least 18.0% of GDP.

Customs and excise tax

  • Excise duty on airtime to increase from 15% to 17.5%;
  • A 10% duty on the exportation of maize has been introduced;
  • Customs duty on fittings used for irrigation has been removed;
  • Customs duty on plastic shopping bags has been increased from 25% to 40%;
  • Customs duty on semi processed edible oils has been increased from 5% to 15%;
  • Advance income tax on importation of goods has been increased from 6% to 15%;
  • Customs duty on spare parts of different machinery and equipment has beenincreased from 5% to 15%;
  • A surtax of 5% has been introduced on selected imported goods which are also produced locally.

Administration

due dates for the submission of tax returns as follows:

  • For pay-as-you-earn: from the 14th day to the 10th day of every month;
  • For provisional income tax: from the 14th day to the 10th day of the month following the end of every quarter;
  • For excise duty: from the 20th day to the 15th day of every month; and
  • For final income tax and payment of balance of tax: from the 21st day to the 30th day of every month.

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