Zambia’s government has proposed a new top PAYE rate of 39.5%, higher corporate income tax on lower-taxed income and a 0.5% rise in VAT to raise a net estimated ZMW 10.84 billion from 1 January 2027, according to the 2027 National Budget.
Zambia’s Ministry of Finance and National Planning has unveiled a package of direct tax, indirect tax, customs and non-tax revenue measures in the 2027 National Budget, proposing a series of tax changes targeting corporate taxation, mining sector taxation and tax administration.
Key measures include increasing corporate income tax rates, introducing withholding tax on mining dividends, and restricting the Minimum Alternative Tax to businesses reporting losses for three consecutive years. The Budget also proposes higher VAT and customs duties, changes to fringe benefit deductions, and a reduction in the gold mineral royalty for eligible small-scale miners.
Minister of Finance and National Planning Situmbeko Musokotwane delivered the Budget Address to the National Assembly on 6 November 2026.
The Zambia Revenue Authority (ZRA) later published its 2027 Budget Highlights, summarising the tax measures.
Most measures are expected to take effect on 1 January 2027.
Corporate tax
The Budget raises corporate income tax by 5% on all categories of corporate income currently taxed below the standard rate of 30%, which means income taxed at 20% or lower. The government says this is intended to promote tax neutrality and fairness.
Withholding tax on dividends paid by mining companies will rise to 15% from 0%, putting mining dividends on the same footing as those paid in other economic sectors.
The Minimum Alternative Tax (MAT) will be reformed so that it applies only to businesses that declare losses for three consecutive years. This gives firms facing a temporary downturn time to recover before the tax applies.
Employers will also face tighter limits on deductions for fringe benefits. The disallowed amount for non-cash motor vehicle fringe benefits will increase by 10%, while the disallowed amount for non-cash housing fringe benefits will rise to 40% from 37%.
Personal tax
A new top marginal PAYE rate of 39.5% will apply to individuals earning more than ZMW 37,000 a month. Those earning ZMW 37,000 or less will remain under the existing regime.
VAT
The standard VAT rate will go up by 0.5% to 16.5% from 16.0%. The VAT zero-rating on energy-saving appliances will end, and the customs duty exemption on these goods will also be discontinued.
The Budget offers relief for local manufacturers of sanitary products. Imported raw materials used to make sanitary pads, panty liners and other hygiene products will receive a 100% VAT exemption and a suspension of customs duty.
Customs duties, surtaxes and export duties
Customs duty on ceramic tiles will increase to 40% from 25%, a move the government says is meant to protect and promote the local ceramic industry. Imported aluminium tubes, bars, rods and profiles will attract a new selected goods surtax of 20%, while customs duty on them will rise to 25% from a previous range of 0% to 5%.
Selected goods surtax will be harmonised at 30% on imported cement packaging bags and woven bags. The surtax on imported processed meats, and on edible offal of bovine animals, sheep, goats, horses and mules, will increase to 30% from 20%.
For edible oils, a customs duty of 15%, up from 0%, will apply to crude soya bean, crude palm and crude sunflower oil. A selected goods surtax of 10% will also be levied on crude soya bean oil and crude sunflower oil. Customs duty on float glass will be harmonised at 25%, up from 15%.
Approved Public Benefit Organisations (PBOs) will no longer enjoy customs duty relief on second-hand clothing, known as “salaula”, and handbags. A new export duty of 5% will apply to zinc concentrates. In a boost to tourism, customs duty on safari vehicles, hospitality equipment and communications infrastructure used by tourism operators will be suspended in full.
Excise duties on plastics and sugar
The Budget doubles the excise duty on single-use plastics to 200% from 100%. A specific excise duty of 80 ngwee will be charged per plastic bottle. Excise duty on plastic floor coverings, self-adhesive tapes, packaging closures and plastic apparel and accessories will be harmonised at 30%, up from 15%.
On the consumption side, a specific excise duty of ZMW 1 per kilogramme will be introduced on sugar, along with an excise duty of 20% on chocolate and sugar confectionery.
Mining relief
Alongside the higher mining dividend levy, the Budget cuts the mineral royalty on gold by half, to 3% from 6%. The reduction applies to artisanal and small-scale miners who sell their gold to government-approved aggregators.
Fees and levies
Non-tax revenue measures include upward revisions to the mobile money levy across all transaction bands. Passport fees and fees for travel identity documents will rise, and new fees will be introduced. Fees for residence, employment, investor, visitor, temporary employment, cross-border and spouse permits will also go up.
Selected civil registration fees will be introduced or raised. Mechanical horses will be reclassified as heavy vehicles in the category of four axles and above, attracting higher toll fees. Registration fees for non-governmental organisations under the Ministry of Community Development and Social Services will be raised and new fees introduced. Fees and charges linked to mining, mineral processing and exploration licences, including area charges and related administrative fees, will also be revised upward.
