The Income Tax (Amendment) Act (2012)

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Income Tax (Amendment)	[No. 10 of 2012 217

GOVERNMENT OF ZAMBIA

ACT 
No. 10 of 2012

Date of Assent: 19th December, 2012

An Act to amend the Income Tax Act.

[21st December, 2012

ENACTED by the Parliament of Zambia. 		

1.	(1) This Act may be cited as the Income Tax (Amendment) Act, 2012, 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, 2013, and subject to any provisions to the contrary, shall have effect in relation to the charge of tax for the charge year which ends on 31st December, 2013, and in relation to each subsequent charge year.

ll have effect in relation to the charge of tax for the charge year which ends on 31st December, 2013, and in relation to each subsequent charge year.

2.	Section two of the principal Act is amended in subsection
(1) by—
	(a) the insertion, in the appropriate places, of the following new definitions:
		“ agro-processing ” means subjecting any farming produce produced in Zambia to any process which materially changes the farming produce in substance, character or appearance thereby making it a food product, but does not include—
			(a) processing of that farming produce into alcoholic and non-alcoholic beverages, sugar crystals, flour or maize meal; or
			(b) further or additional processing of the farming produce by a third party;
		“ collective investment scheme ” means a collective investment scheme registered under the Securities Act; and
									
						Enactment 			Short title
							and commence-
							ment
							Cap 323
						Amendment 
						of section 2
						Cap. 354
						
Single Copies of this Act can be obtained from the Government Printer,
P.O. Box 30136, 10101 Lusaka, Price K4,000 each

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218  No. 10 of 2012]         Income Tax (Amendment)

be obtained from the Government Printer,
P.O. Box 30136, 10101 Lusaka, Price K4,000 each

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218  No. 10 of 2012]         Income Tax (Amendment)

(b) the deletion of the definitions of "person with disability"
          and "business" and the substitution therefor of the
          following definitions—
             " business " includes:
                   (a) any profession, vocation or trade;
                   (b) any adventure or concern in the nature of trade
                       whether singular or otherwise;
                   (c) manufacturing;
                   (d) farming;
                   (e) agro-processing; and
                   (f) hedging; and

             " person with disability " has the meaning assigned
                to it in the Persons with Disabilities Act, 2012.

Act No. 6 of
2012
Amendment
of section 37   3. Section thirty-seven of the principal Act is amended by the
          deletion of the words "one million, eight hundred and sixty thousand
          Kwacha", wherever they appear, and the substitution therefor of
          the words "three million and sixty thousand Kwacha".

ixty thousand
          Kwacha", wherever they appear, and the substitution therefor of
          the words "three million and sixty thousand Kwacha".

Amendment     4. Section sixty-four A of the principal Act is amended in
of section
64A       subsection (2) by the deletion of the words "two hundred million
          Kwacha" and the substitution therefor of the words "eight hundred
          million Kwacha".

Amendment     5. Section sixty-five of the principal Act is amended in
of section
65        subsection (2) by the deletion of the words "eighty-seven".

mendment     5. Section sixty-five of the principal Act is amended in
of section
65        subsection (2) by the deletion of the words "eighty-seven".

Repeal and    6. The principal Act is amended by the repeal of section
replacement
of section 74 seventy-four and the substitution therefor of the following new
          section:
                          74. (1) The President may enter into an agreement,
                          which may have retrospective effect, with the Government
Double                    of any other country or territory—
taxation
agreements                   (a) to prevent, mitigate or discontinue the levying, under
and mutual
assistance                     the laws of the Republic and of such other country or
in tax                         territory, of taxes in respect of the same income; or
matters
                             (b) for the exchange of information on tax matters or
                                 for mutual assistance in tax matters with the
                                 objective of rendering reciprocal assistance—
                                   (i) in the determination of credits and exemptions
                                       in respect of Zambian tax and foreign tax;

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Income Tax (Amendment)                      [No. 10 of 2012 219

in respect of Zambian tax and foreign tax;

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Income Tax (Amendment)                      [No. 10 of 2012 219

(ii) in the provision of data on fraud, civil and 
             criminal tax offences;
       (iii) in the administration and collection of taxes 
             under the tax laws of the Republic and 
             such other country or territory;
       (iv) in the carrying out of tax examinations in 
            Zambia or abroad; and
        (v) in the carrying out of simultaneous or joint 
            tax examinations.

   (2) Any information received by a country or territory 
under an agreement entered into under subsection (1) shall 
be treated as secret in the same manner as information 
obtained under the domestic laws of that country or territory 
and shall be disclosed only to persons or authorities involved 
in the assessment, collection enforcement, prosecution or 
determination of appeals in relation to, the taxes under this 
Act.

r authorities involved 
in the assessment, collection enforcement, prosecution or 
determination of appeals in relation to, the taxes under this 
Act.

(3) Subsection (2) shall not be construed so as to impose 
on a country or territory the obligation to—
       (a) carry out administrative measures at variance with 
           the laws and administrative practices of that 
           country or territory;
       (b) supply information which is not obtainable under the 
           laws of that country or territory or under the laws 
           of Zambia; or
       (c) supply information which would disclose any trade. 
           business, industrial, commercial or professional 
           secret or trade process, or information, the 
           disclosure of which would be contrary to public 
           policy.

    (4) The Minister shall lay a copy of an agreement referred 
to in subsection (1) before Cabinet for approval.

    (5) The President shall, as soon as practicable after the
conclusion and approval of any agreement under this section. 
notify the public of the terms of the agreement by statutory 
instrument, and the agreement shall, from the date of 
commencement of the statutory instrument, have effect as if 
enacted under this Act as long as the agreement has the effect 
of law in the other country or territory.

the statutory instrument, have effect as if 
enacted under this Act as long as the agreement has the effect 
of law in the other country or territory.

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Amendment	7.	Section seventy-eight is amended—
of section 78		(a)	by the deletion of subsection (1) and the substitution
			therefor of the following:
				(1)	a person who fails to pay tax in accordance
					with section seventy-seven—
					(a)	on or before the date on which the tax is
						due;
					(b)	within thirty days of the date of notice of
						assessment from which the tax
						assessed is due; or
					(c)	in the case of provisional tax, within
						fourteen days of the date on which that
						payment is due;
				is liable to the penalty specified in subsection (2); and
			(b)	in subsection (2), by the insertion, immediately after the
				words “each month”, of the words “or part thereof”.

ified in subsection (2); and
			(b)	in subsection (2), by the insertion, immediately after the
				words “each month”, of the words “or part thereof”.

Amendment	8.	Section eighty-seven of the principal Act is amended by
of section 87	the insertion, immediately after subsection (5), of the following new
		subsection:
			(6)	Notwithstanding subsection (1) to (5), where a
				person, pursuant to subsection (1), claims that the pay-as-
				you-earn tax for any charge year has been paid or is deemed
				to have been paid in excess by deduction or otherwise, that
				person shall make the claim, in writing, or by way of return to
				the Commissioner-General, not later than six years after the
				end of the charge year to which the claim relates.

Amendment	9.	Section ninety-seven B of the principal Act is amended
of section	by—
97B		(a)	the deletion of subsection (2); and
		(b)	the renumbering of subsection (3) as subsection (2).

of the principal Act is amended
of section	by—
97B		(a)	the deletion of subsection (2); and
		(b)	the renumbering of subsection (3) as subsection (2).

Amendment	10.	The Second Schedule to the principal Act is amended—
of Second		(a)	in subparagraph (1) of paragraph 5—
Schedule			(i)	by the deletion in item (j), after the semi colon, of
					the word “and”;
				(ii)	by the deletion in item (k) of the full stop and the
					substitution therefor of a semi colon and the
					word “and”; and	
				(iii)	by the insertion, immediately after item (k), of
					the following:

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Income Tax (Amendment)  [No. 10 of 2012  221

word “and”; and	
				(iii)	by the insertion, immediately after item (k), of
					the following:

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Income Tax (Amendment)  [No. 10 of 2012  221

Amendment	10.	The Second Schedule to the principal Act is amended—
of Second		(a)	in subparagraph (1) of paragraph 5—
Schedule			(i)	by the deletion in item (j), after the semi colon, of
					the word “and”;
				(ii)	by the deletion in item (k) of the full stop and the
					substitution therefor of a semi colon and the
					word “and”; and	
				(iii)	by the insertion, immediately after item (k), of
					the following:

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Income Tax (Amendment)  [No. 10 of 2012  221                  (f) collective investment scheme to the extent
                     to which the income is distributed to
                     participants in the collective investment
                     scheme; and
                 (b) in item (aa) of paragraph 7, by the deletion of the words
                     "first declaration" and the substitution therefor of the
                     words "commencement of operations of the approved
                     investment". 11.

ion" and the substitution therefor of the
                     words "commencement of operations of the approved
                     investment". 11.

The Fifth Schedule to the principal Act is amended —
        (a) in paragraph 4A by the deletion of the word "approved"
            and the substitution therefor of the words "operating in
            a multi-facility economic zone or industrial park
            declared";
        (b) in subparagraph (5) of paragraph 10 by the insertion,
            immediately after the word "farming", of a comma and
            the words "agro-processing"; and
        (c) in paragraph 22 by the deletion of subparagraph (2) and
            the substitution therefor of the following:
            (2) The deduction to be allowed for a charge
            year for a mine shall be twenty-five percent of the
            original expenditure to the extent that equipment, plant,
            machinery or anything related to capital expenditure
            as defined under paragraph 19 of this Part is brought
            into use in the carrying out of mining operations and
            the expenditure has not already been allowed as a
            deduction. 12.

into use in the carrying out of mining operations and
            the expenditure has not already been allowed as a
            deduction. 12.

The Ninth Schedule to the principal Act is amended in       Amendment
       Part II by the deletion of the figure "200,000,000" and the substitution of Ninth
       therefor of the figure "800,000,000". Schedule
  13. The Charging Schedule to the principal Act is amended—        Amendment
        (a) in subparagraph (1) of paragraph 2 by—                   of Charging
            (i) the deletion in item (c) of the words "twenty-four  Schedule
                million Kwacha" and the substitution therefor
                of the words "twenty-six million, four hundred
                thousand Kwacha";
            (ii) the deletion in item (d) of the words "twenty-four
                 million Kwacha" and "thirty-three million, six
                 hundred thousand Kwacha" and the substitution
                 therefor of the words "twenty-six million, four
                 hundred thousand Kwacha" and "thirty-six
                 million Kwacha", respectively;

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222 No. 10 of 2012] Income Tax (Amendment)

hundred thousand Kwacha" and "thirty-six
                 million Kwacha", respectively;

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222 No. 10 of 2012] Income Tax (Amendment)

(iii) the deletion in item (e) of the words “thirty-three
      million, six hundred thousand Kwacha” and
      “sixty-eight million, four hundred thousand
      Kwacha” and the substitution therefor of the
      words “thirty-six million Kwacha” and “seventy
      million, eight hundred thousand Kwacha”,
      respectively; and 

      (iv) the deletion in item (f) of the words “sixty-eight
      million, four hundred thousand Kwacha” and
      the substitution therefor of the words “seventy
      million, eight hundred thousand Kwacha”;

   (b) in paragraph 5 by—

(i)    the insertion in item (b), immediately after the word
      “farming”, of the words “and agro-processing”; 

(ii)   the insertion in item (d), immediately after the
      word “from”, of the words “the production of
      organic fertiliser and”;

(ii)   the deletion of items (e), (f) and (g) and the
      substitution therefor of the following:

“the production of
      organic fertiliser and”;

(ii)   the deletion of items (e), (f) and (g) and the
      substitution therefor of the following:

Act No. 11     (e) on the income of a business enterprise
of 2006           operating in a priority sector, multi-
                  facility economic zone or industrial park
                  declared under the Zambia Develop-
                  ment Agency Act, 2006, tax shall be
                  charged at—

                  (i) zero percent for a period of five
                      years starting from the year of
                      commencement of operations
                      of the approved investment; 

                  (ii) fifty percent from the sixth to the
                       eighth year after commence-
                       ment of operations of the
                       approved investment; and 

                  (iii) seventy-five percent from the
                        ninth to the tenth year;

Act No. 11      (f) the Commissioner-General shall withdraw
of 2006             the incentives granted under item (e) if
                     a business enterprise fails or neglects
                     to fulfil its pledge for employment of
                     citizens of Zambia under the Zambia
                     Development Agency Act, 2006;

to fulfil its pledge for employment of
                     citizens of Zambia under the Zambia
                     Development Agency Act, 2006;

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Income Tax (Amendment) [No. 10 of 2012 223

(g) tax to be deducted from any dividend declared by a company operating in a priority sector, multi-facility economic zone or industrial park declared under the Zambia Development Agency Act, 2006, shall, for a period of five years from the date of commencement of operations of the approved investment, be at the rate of zero percent per annum; 

(c) in paragraph 7, by the deletion of items (i) and (ii) and the substitution therefor of the following:

(i) tax required to be deducted from any payment of interest arising from savings or deposit accounts held with financial institutions to an individual under section eighty-two A shall be deducted at the rate of zero percent per annum; and 

(ii) tax required to be deducted from any payment of interest, other than interest arising from savings or deposit accounts held with financial institutions to an individual under section eighty-two A shall be deducted at the rate of fifteen percent per annum and shall be the final tax; and 

(d) by the insertion of the following new items:

ty-two A shall be deducted at the rate of fifteen percent per annum and shall be the final tax; and 

(d) by the insertion of the following new items:

(iv) tax required to be deducted from the payment of a management or consultancy fee deemed under section eighteen to be from a source within the Republic shall be at the rate of twenty percent; and 

(v) tax required to be deducted from the payment of royalties to a non-resident deemed under section eighteen to be from a source within the Republic shall be at the rate of twenty percent.

Act No. 11 of 2006

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Sure, here is the transcription:

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224

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