Income Tax (Amendment)

An Act to amend the Income Tax Act. [22nd December, 2017
ENACTED by the Parliament of Zambia. 1. (1) This Act may be cited as the Income Tax (Amendment)
Act, 2017, and shall be read as one with the Income Tax Act, in
this Act referred to as the principal Act. (2) This Act shall come into operation on 1st January, 2018. 2. Section 2 (1) of the principal Act is amended by—
(a) the deletion of the definition of “ incapacitated person ”
and the substitution therefor of the following:
“ incapacitated person ” means a child or a person
who has a mental disability that inhibits that
person from exercising independent legal
capacity;
(b) the deletion of the definition of “ management or
consultancy fee ” and the substitution therefor of the
following:
“ management or consultancy fee ” means payment
in any form, other than an emolument, for or in
respect of any—
(a) administrative, consultative, managerial,
technical or other service of a like
nature; or
Enactment
Short title
and
Commencement
Amendment
of section 2
Cap. 323
Income Tax (Amendment) [No. 16 of 2017 665
GOVERNMENT OF ZAMBIA
ACT
No.

ure; or
Enactment
Short title
and
Commencement
Amendment
of section 2
Cap. 323
Income Tax (Amendment) [No. 16 of 2017 665
GOVERNMENT OF ZAMBIA
ACT
No.

16 of 2017
Date of Assent: 19th December, 2017
Single copies of this Act may be obtained from the Government Printer,
P.O. Box 30136, 10101 Lusaka. Price K16.00 each

of Assent: 19th December, 2017
Single copies of this Act may be obtained from the Government Printer,
P.O. Box 30136, 10101 Lusaka. Price K16.00 each

(b) creation, design, development, installation
or maintenance of any information
technology solution, programme,
system, or their combination; and
(c) the deletion of the definition of “ taxpayer identification
number ” and the substitution therefor of the following:
“ taxpayer identification number ” means a number
designated and issued by the Commissioner-
General—
(a) to any corporate person or
unincorporated body of persons; and
(b) to an individual who has attained the
age of 18 years. 3. Section 4 (3) of the principal Act is amended by the deletion
of paragraph (b) and the substitution therefor of the following:
(b) the place of effective management of the person’s business
or affairs is in the Republic for that year. 4. Section 7 of the principal Act is amended by the deletion of
subsection (3) and the substitution therefor of the following:
(3) The Commissioner-General may appoint a person to
collect base tax, presumptive tax, turnover tax or tax on rental
income assessed or payable under the provisions of this Act
on such terms and conditions as the Minister may, by statutory
instrument, prescribe. 5.

l
income assessed or payable under the provisions of this Act
on such terms and conditions as the Minister may, by statutory
instrument, prescribe. 5.

The principal Act is amended by the repeal of section 37
and the substitution therefor of the following:
37. (1) A deduction shall be allowed in ascertaining the
gains or profits of an employer for a charge year of any
amount paid during that charge year by the employer by way
of contribution to an approved fund established for the benefit
of employees, including an approved fund within the meaning
of paragraph (c) of the definition of “ approved fund ” and a
fund approved under paragraph 5 of the Fourth Schedule, if
the fund to which the contribution is made continues to be an
approved fund for that charge year. (2) A deduction shall not be allowed under
subsection (1) in respect of any contribution other than a
contribution—
(a) which is not a contribution in arrear; or
(b) which is a special lump sum contribution which is
allowed to be deducted under and in accordance
with subsection (3). Amendment
of Section 4
Amendment
of Section 7
Repeal and
replacement
of section 37
Approved
fund
deductions
666 No. 16 of 2017] Income Tax (Amendment)

Amendment
of Section 4
Amendment
of Section 7
Repeal and
replacement
of section 37
Approved
fund
deductions
666 No. 16 of 2017] Income Tax (Amendment)

Amendment
of section
45B
(3) A contribution paid by an employer shall be a special
lump sum contribution and shall be treated as a current
contribution for a charge year or as current contributions for
the charge years in such amount as the Commissioner- General
may direct if paid—
(a) in respect of a service rendered to the employer by
an employee prior to the date of the employee
becoming a member of the approved fund to which
the contribution is paid in order that the employee
may qualify for benefits under that approved fund
in respect of that prior service; or
(b) for any other reason approved by the Commissioner-
General. (3) The deduction to be allowed for a charge year in
respect of current contributions to an approved fund other
than a fund approved under section 11(1) of the former Act
shall not exceed twenty per centum of the emoluments liable
to tax received from the employer in that charge year by
each employee in respect of whom the contributions are paid. 6. Section 45B (1) of the principal Act is amended in column
1 by the deletion of the words “ financial institution ” and the
substitution therefor of the words “ bank or financial institution ”. 7.

ed in column
1 by the deletion of the words “ financial institution ” and the
substitution therefor of the words “ bank or financial institution ”. 7.

Section 46 (4) of the principal Act is amended by the insertion
of the following paragraph after paragraph (b):
(c) in the case of a turnover tax return, two hundred and
fifty penalty units per month or part thereof. 8. Section 46A (3)(a) of the principal Act is amended by the
insertion of the following subparagraph immediately after
subparagraph (ii):
(iii) in case where a person registers for income tax after
the due date as specified under this subparagraph (I) and
(ii), the return shall be due within 90 days of that
registration. 9. The principal Act is amended by the repeal of section 54
and the substitution therefor of the following:
54. (1) A resident company shall deliver to the
Commissioner-General a copy of its memorandum and articles
of association, and copies of all amendments thereto, and, if
the Commissioner-General so determines, all the particulars
relating to the company’s affairs and shareholders that the
Commissioner-General may in writing require. Amendment
of section 46
Repeal and
replacement
of section 54
Amendment
of section
46A
Information
as to
companies
Income Tax (Amendment) [No. 16 of 2017 667

ent
of section 46
Repeal and
replacement
of section 54
Amendment
of section
46A
Information
as to
companies
Income Tax (Amendment) [No. 16 of 2017 667

(2) A company shall, within one month after another
company has become related to it, lodge with the
Commissioner-General a notice of that fact together with the
particulars identifying the body corporate. (3) If a company fails to comply with this section, the
company, and each officer in default, commits an offence,
and is liable, on conviction, to a penalty not exceeding ten
thousand penalty units for each day that the failure continues. 10. The principal Act is amended by the deletion of section 64
and the substitution therefor of the following:
64. (1) An assessment may be made by the
Commissioner-General in any amount according to the best
of the Commissioner-General’s judgement in respect of any
person—
(a) who has not delivered a return as required by this
Act, or on whose behalf a return has not been so
delivered;
(b) whose return does not satisfy the Commissioner-
General;
(c) who the Commissioner-General has reasons to
believe is about to leave the Republic;
(d) where the Commissioner-General has reason to
believe that the company is to be wound-up or
liquidated.

to
believe is about to leave the Republic;
(d) where the Commissioner-General has reason to
believe that the company is to be wound-up or
liquidated.

(2) Where the Commissioner-General does not have
sufficient information on which to estimate an assessment
under subsection (1), the Commissioner-General may when
establishing the amount of tax which is due and payable
resulting from any subsequent assessment which the
Commissioner-General may determine for the same charge
year—
(a) assess a base tax of three hundred and sixty-five
kwacha in any charge year; and
(b) allow a credit for the amount of any base tax which
has been paid in a charge year. 11. Section 81 of the principal Act is amended by the—
(a) deletion in subsection (1) of the words “ as if the payment
were subject to Part VI, which relates to Pay As You
Earn ” and the substitution therefor of the words “ as
prescribed in subsection (1A) ”; and
Amendment
of section 64
E s t i m a t e d
assessments
Amendment
of section 81
668 No. 16 of 2017] Income Tax (Amendment)

bed in subsection (1A) ”; and
Amendment
of section 64
E s t i m a t e d
assessments
Amendment
of section 81
668 No. 16 of 2017] Income Tax (Amendment)

(b) insertion of the following subsection immediately after
subsection (1):
(1A) A person to whom subsection (1) applies,
shall submit a return and make a payment of tax within
fourteen days of the end of the month in which the
payment is due. 12. Section 81A of the principal Act is amended by the—
(a) deletion in subsection (1) of the words “ as if it were a
payment subject to Part VI of the Act ” and the
substitution therefor of the words “ as prescribed in
subsection (lA) ”; and
(b) insertion of the following subsection immediately after
subsection (1):
(1A) A person or partnership to whom
subsection (1) applies shall submit a return and make
a payment of the tax, within fourteen days of the end
of the month in which the payment is due. 13.

section (1) applies shall submit a return and make
a payment of the tax, within fourteen days of the end
of the month in which the payment is due. 13.

Section 82A of the principal Act is amended by—
(a) the deletion of subsection (2) and the substitution therefor
of the following:
(2) A person or partnership to whom subsection
(1) applies is deemed to have made a payment at the
earliest of the following:
(a) the time when payment is made;
(b) the time when income accrues to a
person; or
(c) the time when income is in any way due
to a person or held to that person’s
order or on their behalf except that
(i) this section shall not apply to
interest payable on a bill of
exchange drawn for one
hundred and eighty days or
less;
(ii) the payment of an amount in
excess of the original issue
price for a treasury bill sold at
a discount from face value shall
be deemed for the purposes of
Amendment
of section
81A
Amendment
of section
82A
Income Tax (Amendment) [No. 16 of 2017 669

count from face value shall
be deemed for the purposes of
Amendment
of section
81A
Amendment
of section
82A
Income Tax (Amendment) [No. 16 of 2017 669

this section to be payment of
interest when the treasury bill
is presented for redemption or
re-discount;
(iii) the Commissioner-General may
determine that the provisions of
subsection (1) (a), (b), (c) or
(d) do not apply in a particular
case and shall, in writing, notify
the person or partnership
concerned that the provisions
of subsection (1) (a), (b), (c)
or (d) as applicable, do not
apply to that person or
partnership to the extent and
to the period specified in the
notification;
(iv) in the case of paragraph (b) of
subsection (1), the direction to
be issued under paragraph (c)
shall only be for interest arising
from a property linked unit of
a property loan stock company;
and
(b) the insertion of the following subsection
immediately after subsection (2):
(2A) A person or partnership to
whom subsection (1) applies shall,
submit a return and make a payment
of the tax within fourteen days of
the end of the month in which the
payment is due. 14. The principal Act is amended by the repeal of section 92A. 15.

f the tax within fourteen days of
the end of the month in which the
payment is due. 14. The principal Act is amended by the repeal of section 92A. 15.

The Fifth Schedule to the principal Act is amended in
paragraph 10 by the—
(a) deletion of subparagraph (6) and substitution therefor of
the following:
(6) Despite the other provisions of this Act, a
person operating a business in a priority sector
declared under the Zambia Development Agency Act,
2006 may claim on a straight line basis, wear and
Repeal of
section 92A
Amendment
of Fifth
Schedule
Act No. 11
of 2006
670 No. 16 of 2017] Income Tax (Amendment)

aim on a straight line basis, wear and
Repeal of
section 92A
Amendment
of Fifth
Schedule
Act No. 11
of 2006
670 No. 16 of 2017] Income Tax (Amendment)

tear at an accelerated rate, not exceeding 100 percent
in respect of any new implement, plant or machinery
acquired and used by the business for the purposes
of that business.
(b) insertion of the following new subparagraph immediately
after subparagraph (6);
(7) Where a business under paragraph (6)
uses an accelerated rate, that business shall not use
another rate without the consent of the
Commissioner-General.
16. The Ninth Schedule to the principal Act is amended by the
deletion of Part I and substitution therefor of the following:
PRESUMPTIVE TAX
PART I
Type of vehicle) Proposed amount of (sitting
capacity tax per vehicle (per annum)
64 seater and above K10,800
50 - 63 seater K9,000
36 - 49 seater K7,200
22 - 35 seater K5,400
18 - 21 seater K3,600
12 - 17 seater K1,800
Below 12 seater (including taxis) K 900
17. Paragraph 5 of the Charging Schedule to the principal Act
is amended by the deletion of subparagraphs (e) and (f) and the
renumbering of subparagraph (g) as subparagraph (e).
Amendment
of Ninth
Schedule
Amendment
of Charging
Schedule
Income Tax (Amendment) [No. 16 of 2017 671

672 No. 16 of 2017]