Reduces the corporate income tax rate and introduces new tax incentives

The Minister of Finance’s 2022 budget address, delivered on October 29 2021, introduced several key changes to the tax regime for investment. Among others, it reduced the general corporate income tax rate from 35% to 30%, extended the 15% corporate income tax rate for hotels’ income from lodging and food services through 2022; introduced a 20% withholding tax on reinsurance placed with non-Zambian firms and made the mineral royalty levy deductible for corporate income tax purposes.

In addition, in order to revamp multi-facility zones, the new budget provided for a 10 years tax exemption on dividends declared on profits made on exports by companies operating in a Multi Facility Economic Zone or Industrial Park, under the Zambia Development Agency Act No. 11 of 2006. For years 11 to 13, only 50% of profits should be taxed and 75% of profits for years 14 and 15.

• Type:

  • Treatment and operation (Corporate taxation)
  • Promotion and facilitation (Investment incentives, Special economic zones)

• Industry:

  • Not industry specific

• Sources:

  • ZRA, Zambia 2022-Budget-Highlights, https://www.zra.org.zm/wp-content/uploads/2021/11/2022-Budget-Highlights.pdf, 05 Nov 2021
  • MNETax, Zambian budget 2022 includes corporate income tax, transfer pricing changes, https://mnetax.com/zambian-budget-2022-includes-corporate-income-tax-transfer-pricing-changes-46355, 03 Dec 2021