First Schedule (Section 17)
Further classification of income
1. Maintenance
Income includes amounts received by way of maintenance or allowance, under any judicial order or decree in connection with matrimonial proceedings, or under a written separation agreement.2. Improvements
(1)Income includes, in the case of any person to whom, under any agreement relating to or derived from the grant to any other person of the use or occupation of land or buildings, there accrues the right to have improvements effected on the land or to the buildings by any other person—(a)the amount stipulated in the agreement as the value of, or the amount to be spent on, the improvements; or(b)if no amount is stipulated, an amount representing the value of the improvements;and in either case the amount is deemed for the purposes of this Act to have been received by the first-mentioned person in equal monthly instalments from the date the improvements were effected over the unexpired period of the agreement or over twenty-five years, whichever period is the less.(2)All the instalments deemed under sub-paragraph (1) to have been received by a person that have not been included in his income before any of the following events are treated as having been received by him immediately before the happening of any such event:(a)the cancellation of the agreement;(b)the sale or other disposal of the land or buildings as improved; or(c)his death or bankruptcy, or, in the case of a company, its liquidation.3. Commencement and cessation of employment
Income includes any amount received in connection with the taking up of employment or by reason of the cessation of any agreement for employment including compensation for loss of office or employment.4. Lump sum payments
Income includes lump sum payments.5. Capital recoveries
(1)Income of a person includes any amount paid by which recoveries from capital expenditure exceed—(a)in the case of a building, such residue of the expenditure ranking for capital allowances incurred in respect of the building on which capital recovery has been made as remains after the deduction of any initial, wear and tear or other capital allowance or similar deduction whether allowed under this Act or under any provisions of the previous law for any charge year in respect of the building; but in no case shall the amount to be included in the income exceed the total of the deductions so allowed to him in respect of the building;(b)in case of implement, machinery or plant, such residue of the expenditure ranking for capital allowances incurred in respect of the implement, machinery or plant as remains after deduction of any wear and tear or other capital allowances or similar deduction whether allowed under this Act or under any provisions of the previous law for any charge year;(c)in relation to a mine in respect of assets on which an allowance has not been claimed under Part I or Part II of the Fifth Schedule, the balance of unredeemed capital expenditure;Provided that this paragraph shall not apply to recoveries from expenditure incurred on farm improvements and farm works to which Part I or Part II of the Sixth Schedule applies.(2)For the purposes of items (a) and (b) of sub-paragraph (1)—(a)a recovery from capital expenditure shall be deemed to have taken place when—(i)a building ceases to belong to such person without being sold, or permanently ceases to be used by such person for the purposes of any business;(ii)any implement, machinery or plant ceases to belong to such person without being sold, or permanently ceases to be used by such person for the purposes of his business.(b)the amount of the recovery from capital expenditure shall be the amount which, according to the Commissioner-General's determination, the asset would have realised in the open market at the time the event giving rise to the recovery occurred.(3)For the purposes of this paragraph the expression "capital allowances" shall not include any investment allowance deducted pursuant to section thirty-four, or pursuant to paragraph (w) of subsection (2) of section thirteen of the former Act.6. Exotic timber
Where land is disposed of for valuable consideration, and there is on that land exotic timber which has been for sale, the market value of that timber at the time the land is disposed of is included in income.7. Farm stock
Any stock owned by a farmer at the beginning and end of each period for which he makes up the accounts of his farming business shall, in computing the gains or profits from such business be taken into account:Provided that where livestock bought by a farmer for stud has been included in stock at the end of a period for which accounts are made up such livestock shall be included in stock at the beginning of the next period for which accounts are made up. For the purposes of this paragraph "stock" includes all livestock other than livestock bought by a farmer for stud, produce, and crops which have been harvested.Second Schedule (Section 15)
Exemptions
Part I – Exempt office holders
1.The emoluments of the President are exempt from tax.2.The income of the Litunga of the Western Province as Litunga and the income of any Chief received as a Chief from the Government, are exempt from tax.Part II – Foreign exemptions
3.There shall be exempt from tax—(a)the emoluments of any individual payable in respect of any office which he holds in the Republic as an official of any foreign government, if such individual is resident in the Republic solely for the purpose of carrying out the duties of his said office;(b)the emoluments of any domestic or private servant of any individual referred to in sub-paragraph (a) payable in respect of domestic or private services rendered or to be rendered by such servant to such individual, if such servant is not a Zambian citizen and is resident in the Republic solely for the purpose of rendering the said services;(c)the emoluments payable to any individual who is not a Zambian citizen and who is temporarily employed in the Republic in connection with any technical assistance scheme provided by any foreign country, any international organisation, or agency, any foreign foundation or any foreign organisation, if the exemption of such emoluments or such part of the emoluments as may be specified is authorised under the terms of an agreement entered into by the government of such foreign country, international organisation or agency, foreign foundation or foreign organisation with the Government of the Republic;(d)the emoluments of any individual in respect of service with any international organisation or any agency of a foreign government or any foreign foundation or organisation, which organisation, agency or foundation is approved by the Minister by order in the Gazette and such individual is not a Zambian citizen and is resident in the Republic solely for the purpose of rendering the said service or secondment to any Zambia organisation, agency, or foundation.4.There shall be exempt from tax such income of—(a)any international organisation;(b)any agency of a foreign government;(c)any foreign foundation or organisation;as is approved by the Minister by order in the Gazette.Part III – Exempt organisations
5. Various organisations
(1)The income is exempt from tax of any—(c)registered trade unions;(d)agricultural society, mining or commercial society, whether corporate or unincorporate, or any other society having similar objects, not operating for the private pecuniary gain or profits of its member;(e)club, society or association organised and operated only for social welfare, civil improvement, pleasure, recreation or like purposes, if its income, whether current or accumulated, may not in any way be received by an member or shareholder;(f)approved fund or medical aid society;(h)employees' savings scheme or fund, if approved by the Commissioner-General;(j)political party registered as a statutory society under the Societies Act.(2)The income of the following shall be exempt from tax:(a)the Commonwealth Development Corporation;(b)the Economic Co-operation Administration and Mutual Security Agency, or successor agencies of the Government of the United States of America;(3)The income of a co-operative society registered under the Co-operative Societies Act shall be exempt from tax if the gross income, before deduction of any expenditure, of such co-operative society when divided by the number of its members (that is to say, the number of individuals who are members together with, where another co-operative society so registered is a member, the number of individuals who are members of that other co-operative society) on the last day of any accounting period of twelve months does not exceed eight hundred kwacha or, if such accounting period is more or less than twelve months, such figure as bears the same relation to eight hundred kwacha as the number of months in such accounting period bears to twelve.(4)The income of a non-resident person derived from the carrying on of the business of shipowner, charterer or air transport operator shall be exempt from tax where the country in which such non-resident person is resident extends a similar exemption to shipowners, charterers and air transport operators who are not resident in such country but who are resident in the Republic.(5)The income of any organisation, partnership or body corporate, or such part of the income as is specified, shall be exempt from tax where the objects and activities within the Republic of such organisation, partnership or body corporate are to assist in the development of the Republic and such exemption of the income, or such part thereof as is specified is approved by the Minister by Statutory Order.6. Charities
(1)There shall be exempt from tax the income of any charitable institution or of any body of persons or trust established for the promotion of religion or education, or for the relief of poverty or other distress, if, in relation to the people of the Republic, the income may not be expended for any other purpose.(2)If the income referred to in sub-paragraph (1) is the profit of a business carried on by the charitable institution, body of persons or trust receiving it, that income is not exempt from tax unless it is applied only to the purposes set out in that sub-paragraph, and either—(a)the business is carried on in the course and furtherance of those purposes; or(b)the work involved in the business is mainly carried out by the beneficiaries under those purposes.Part IV – Exempt income
7. Various exemptions
There is exempt from tax income received—(a)by way of lump sum payments withdrawn from an approved fund at retirement age or death or on the beneficiary becoming permanently incapable of engaging in an occupation or such sums withdrawn from an approved fund which the Commissioner-General determines cannot be enjoyed by the member until he attains retirement age;(b)as a war disability pension, or as a war widow's pension, or as an old age pension paid out of public funds, or as a benefit paid under any written law in respect of injury or disease suffered in employment;(c)in conjunction with the award of military, police, and fire brigade decorations for distinguished or good conduct or long service;(d)by an individual or his dependants or heirs, being on account of his injury or sickness, from any approved fund or registered trade union or medical aid society or under any policy of insurance;(e)as a local overseas allowance by any member of the Defence Force of the Republic while on service officially declared to be active service;(f)as an allowance paid for service outside the Republic by the Government or a statutory corporation in respect of an excess of living expenses due to such service;(g)in respect of a scholarship or bursary, for the purposes of education and maintenance during such education;(h)by way of alimony, maintenance or allowance under any judicial order or decree in connection with matrimonial proceedings, or under any separation agreement, to the extent of the amount of the alimony, maintenance or allowance that has not been allowed as a deduction to another individual under this Act;(j)by any individual, the amount of which is prescribed by the Ministerial and Parliamentary Offices (Emoluments) Act, and which, pursuant to the provisions of that Act, is exempt from tax;(k)by way of grant as compensation for loss of office or disturbance by an officer admitted to the permanent and pensionable establishment of the Government;(l)by way of any education allowance or passage value payable to a public officer or payable in respect of his wife and children or in respect of his wife or children, subject to the provisions of paragraph 8 (3);(n)by way of gratuity to the extent that such gratuity is, for the purposes of this Act, regarded and dealt with as income received by an individual other than by way of gratuity in accordance with paragraph (i) of the proviso to subsection (1) of section twenty-one where the employer from whom the income is received is the Government, a municipal council, township council, rural council or any other council established under the Local Government Act, the University of Zambia or the National Council for Scientific Research:(o)by way of a dividend from a source outside the republic:(i)the dividend is from a source outside the republic;(ii)the person receiving the dividend has not during the charge year in which the dividend is received, remitted any moneys outside the republic and the provisions of the Exchange Control Act relating to contracts of employ-ment, farming profits, education costs and immigration.(p)by a person designated as an enterprise under the Investment Act, or its successor, as the case may be, who has been granted the incentives provided under that Act, to such extent and for such period as the Minister may prescribe(q)by way of pension received by an individual from an approved fund; and(r)by way of a dividend declared from farming income for the first five years the distributing company commences farming.(s)by an individual by way of sitting allowance for attending a council meeting.(t)ex-gratia payment made to a spouse, or dependant on the death of an employee.8. Passages
(1)For the purposes of this paragraph—"child" means a child of an individual who at the commencement of the charge year in which a passage is made is under nineteen years of age and is, at the time the passage is made, unmarried and wholly dependent on such individual;"commencement passage" means the first passage under the terms of the written contract granting such passage to the Republic from the home country of an individual;"education passage" means a return passage between the Republic and the place where a child is receiving full-time education outside the Republic;"home country" means the country in which an individual is resident for the purposes of income tax or the equivalent tax, immediately before coming to the Republic, or the country of which the individual is a citizen;"leave passage" means a return passage taken for leave purposes between the Republic and the home country of an individual or in the case of an individual undergoing full-time education outside the Republic, between the place where the child is receiving full-time education and the home country;"passage" means a journey by air by the cheapest available fare as an economy class passenger on a scheduled airline the cost of which is granted to an individual under the terms of a written contract for his employment in the Republic;"terminal leave" means leave due to an individual under the terms of a written contract for his employment in the Republic, taken after the last day of service of the individual in the Republic under such contract;"terminal passage" means the last passage under the terms of the written contract granting the passage from the Republic to the home country of an individual or, in the case of a child of the individual undergoing full-time education outside the Republic, from the place where the child is receiving full-time education to the home country;(2)This paragraph shall not apply to the value of a passage made—(a)by an individual, his wife or child referred to in sub-paragraph (1) of paragraph 7, subject, however, to the provisions of sub-paragraph (3);(b)by an individual or by the spouse or child of such individual where the individual is an effective shareholder or a director, other than a whole-time service director, of the company granting the passage;(c)by the spouse or child of an individual who alone or in partnership as employer grants the passage;(d)by an employee of a company granting a passage or the spouse or child of such employee, where the employee or his spouse is carrying on a business alone or in partnership and the services of the employee are provided to such business by such company; or(e)by the wife or child of an individual where the passage is granted under the terms of a written contract for the employment of the wife in the Republic if at the time such passage is made the wife is living with the individual and sub-paragraph (9) does not apply.(3)The right of an individual to exemption from tax in respect of the value of a passage under this paragraph shall be available under the terms of only one written contract for employment in any one period of employment in the Republic.(4)Subject to the other provisions of this paragraph, the value of a commencement and a terminal passage made by an individual shall be exempt from tax.(5)Subject to the other provisions of this paragraph, the value of a commencement and a terminal passage made by the wife or child of an individual shall be exempt from tax:Provided that—(i)the written contract which grants the cost of the passage specifies that the individual is to be employed in the Republic for a period of not less than one year, excluding terminal leave;(ii)the individual is so employed under the contract for the specified period or for a lesser period, where the Commissioner-General determines that the individual was prevented from being so employed for the specified period due to circumstances beyond the control of such individual;(iii)for each contract the value of not more than one commencement and one terminal passage in respect of a wife shall be exempt from tax; and(iv)the value of a commencement passage made by a child shall not be exempt from tax where the child leaves the Republic for full-time education outside the Republic within four months of arriving in the Republic.(6)Subject to the provisions of this paragraph, the value of a leave passage made by an individual, his wife or his child, shall be exempt from tax:Provided that—(i)the written contract which grants the cost of the passage specifies that the individual is to be employed in the Republic for a period of not less than three years, excluding terminal leave;(ii)the individual is so employed under the contract for the specified period;9. Interest
(2)The following interest is exempt from tax:(a)interest on any public loan raised by Government or a statutory corporation, where the terms of the loan provide that the interest thereon shall be exempt from tax;(b)interest on any bond issued under or in respect of a loan of the kind described in clause (a);(c)Government of Zambia bonds.(4)The first two hundred and forty thousand kwacha of interest earned by an individual during the charge year on all sums deposited or invested in a building society registered under any law relating to the registration of building societies for the time being in force in the Republic, or deposited in a savings or deposit account with a financial institution registered under the Banking and Financial Services Act, shall be exempt.(5)The first two hundred and forty thousand kwacha of discount income earned by an individual in a charge year on all sums invested in Treasury Bills or any other similar financial instruments sold at a discount from face value, shall be exempt.10. Annuities
(1)An annuity shall be exempt from tax where such annuity is bought by an annuitant out of a lump sum Annuiti payment withdrawn from an approved fund at retirement age, or death, or on the beneficiary being permanently incapable of engaging in an occupation and which is exempt from tax under paragraph 7(a).(2)An annuity, other than an annuity payable out of an approved fund, shall be exempt from tax to the extent that it represents a return of the purchase price.Third Schedule (Section 25)
Insurance business
1. Insurance other than life
(1)The profits of carrying on insurance business, other than life insurance business, by a resident company are ascertained by—(a)taking the gross premiums, interest, and other income, less premiums refunded or paid on reinsurance; and(b)adding a reserve for unexpired risks at such reasonable percentage as is adopted by the company at the beginning of the year's business; and(c)deducting a reserve for unexpired risks at such reasonable percentage as is adopted by the company at the end of the year's business; and(d)deducting the actual losses (less the amounts received under reinsurance), and other expenses, including deductions under Part II of the Fifth Schedule, allowable as a deduction in calculating business profits.(2)The profits of carrying on insurance business, other than life insurance business, by a company that is not resident are ascertained by—(a)taking the gross premiums, interest, and other income, received in the Republic, less premiums refunded or paid on reinsurance; and(b)adding a reserve for unexpired risks at such reasonable percentage as is adopted by the company in relation to its business as a whole at the beginning of the year's business; and(c)deducting a reserve for unexpired risks at such reasonable percentage as is adopted by the company in relation to its business as a whole at the end of the year's business; and(d)deducting the actual losses (less the amounts received under reinsurance), agency expenses and deductions allowed under Part II of the Fifth Schedule incurred in the Republic, and such proportion of the company's head office expenses as the Commissioner-General determines.2. Life insurance
(1)The profits from the life insurance business of a resident insurance company shall be the excess of the total investment income over three and one-half per centum of the total mean actuarial liabilities, reduced in the proportion which the total mean actuarial liabilities less the mean actuarial liabilities in respect of policies constituting approved funds (as defined in this Act) and annuity policies issued in the Republic under which annuities are being paid bear to the total mean actuarial liabilities.(2)The profits from the life insurance business of a non-resident insurance company shall be the proportion of the company's total investment income that the actuarial liabilities in respect of local taxed life policies bear to the company's total actuarial liabilities less three and one-half per centum of the mean actuarial liabilities in respect of local taxed life policies.(3)For the purposes of this paragraph—"local taxed life policies" means those policies falling within the definition of "local policy" and within the definition of "life policy" in terms of the insurance legislation of the Republic, but excluding policies constituting approved fund (as defined in this Act) and annuity policies under which annuities are being paid;"actuarial liabilities" means the actuarial liabilities determined on the basis used by the company for making returns of actuarial liabilities in terms of the insurance legislation of the Republic;"mean actuarial liabilities" means one-half of the sum of the actuarial liabilities calculated at the beginning and end of the company's financial year for which the Commissioner-General has, in respect of the charge year concerned, accepted the accounts of the company under subsection (1) of section sixty-two.3. Insurance and other business
The tax on the profits of a company that carries on life insurance business in conjunction with any other insurance business is charged in one sum, but the profits of the life insurance business are separately calculated.4. Mutual and proprietary companies
This Schedule applies as well to a mutual insurance company as to a proprietary insurance company.Fourth Schedule (Section 37)
Approved funds
1. Definition of "trustees"
In this Schedule, "trustees" means the persons, by whatever name called, having the management or control of fund which either is or was an approved fund within the meaning of approved fund as defined in this Act, or which is a fund or scheme in relation to which an application is made under paragraph 2 for the approval of the Commissioner-General.2. Approval of pension funds
(1)Where any fund or scheme is established by or on behalf of an employer for the payment, under the rules relating thereto, of pensions and other benefits to his employees in respect of service with him on the retirement of his of pens employees from such service or to dependants of his employees on the death of his employees, then application under funds paragraph 2 may be made for such fund or scheme to be approved by the Commissioner-General; and, where any fund or scheme is so approved, it shall be known as an approved pension fund.(3)The Commissioner-General shall not approve any fund or scheme unless he considers that the rules relating thereto have as their main object the provision of pensions to employees on their retirement from the service of the employer on or after attaining a specified age and unless the Commissioner-General is satisfied—(a)that the fund or scheme is established in the Republic in connection with any business carried on wholly or partly within the Republic by the employer; and(b)that the rules do not—(i)provide for the payment to any employee during his life of any sum except a pension, which may, subject to this paragraph, be commuted or, in the event of the employee leaving the service of his employer in circumstances in which no pension is payable to him, any contributions to the fund or scheme made by him together with reasonable interest thereon;(ii)provide for the payment of the pension otherwise than on the retirement of the employee from the service of his employer on or after attaining the age of 55 years or on earlier retirement on account of any infirmity of mind or body;(iii)provide for the payment of any other sums on the death of the employee except a lump sum, or sums payable by way of annuity to the widow or widower or dependants of the employee;(iv)provide for the payment of the pension otherwise than during the life of the employee or for the payment to the widow or widower of the employee of an annuity otherwise than for a term certain or during the life of the widow or widower or during the minority of any dependant of the employee;(v)provide for the annuity, if any, payable to the widow or widower of the employee to be of a greater annual amount than the pension payable to the employee; and(c)that the rules do—(i)provide that all annual contributions of a recurrent nature to the fund or the scheme shall be in accordance with specified scales and clearly specify the benefits payable to members and their dependants from the fund or under the scheme;(ii)provide that membership of the fund or scheme shall be open to all employees of the group or class of groups or classes specified in the rules;(iii)provide that no pension, annuity or other sum payable out of the fund or under the scheme shall be capable of surrender or assignment except as provided for in sub-paragraph (2)(c)(vii);(iv)provide that no contribution made to the fund or scheme by the employer shall be returnable to him;(v)provide, in any case where the employer is a company the directors whereof have a controlling interest therein, that no director or the widow or widower or any dependant of a director, of the company shall be entitled to any payment out of the fund or under the scheme in respect of his service while he is such a director and that no contributions shall be made to the fund or scheme in respect of the service of such a director; and for the purposes of this sub-paragraph director does not include a whole time service director;(vi)provide that, if the fund or scheme is wound up, the assets thereof shall be applied in the purchase of annuities for its members or, if a member so elects, shall be transferred to another approved fund;(vii)provide that, where any pensions payable out of the fund or under the scheme to an employee may be commuted, the amount of the pension that may be commuted shall not exceed one million kwacha or one-half of the pension, whichever may be the greater.(3)The Commissioner-General may, in his discretion and subject to any conditions he thinks proper to impose—(a)approve a fund or scheme the rules relating to which otherwise satisfy sub-paragraph (2), notwithstanding that the fund or scheme—(i)is established outside the Republic in connection with any business carried on wholly or partly within the Republic by the employer;(ii)is established in connection with a function exercised in the Republic by the employer which is not a business;(iii)provides for a pension to be paid to an employee before he attains the age of 55 years, but not before he attains the age of 45 years, if the Commissioner-General is satisfied that the nature of the service of the employee is one in which persons customarily retire before attaining the age of 55 years;(iv)provides, in the event of the death of an employee after he has commenced to draw a pension from the fund or under the scheme, for the payment of such a sum as together with the total amount paid to him by way of pension does not exceed the contributions made to the scheme in respect of him together with reasonable interest thereon;(v)provides for the employer to recover out of the amount standing to the credit of any employee any sum due by the employee under this Act and paid on his behalf and on his authority by the employer;(b)approve a fund or scheme notwithstanding that the rules relating thereto do not satisfy the other provisions of this paragraph if, in his opinion, such rules satisfy substantially those provisions;(c)approve part of a fund or scheme where the rules relating to that part satisfy substantially the other provisions of this paragraph; and in any such case the part so approved shall be the approved pension fund.3. Procedural provisions relating to approval of fund and withdrawal of approval
(1)Where application is made for approval of any fund or scheme under paragraph 2, then the trustees of the fund or scheme shall make the application in writing to the Commissioner-General; and the application shall be accompanied by two copies of any instrument under which the fund or scheme is established and of the rules relating to relating the fund or scheme.(2)After consideration of any application referred to in sub-paragraph (1), the Commissioner-General shall inform the trustees of the fund or scheme in writing of his decision and, if the decision is an approval of the fund or scheme, of the charge year in relation to which it is approved, whether the fund or scheme is approved in whole or in part and of any conditions to which the approval is subject; and, where any fund or scheme or part thereof has been approved by the Commissioner-General for any charge year, the fund or scheme or part thereof shall, subject to sub-paragraph (3), be deemed to be approved for each subsequent charge year unless the Commissioner-General withdraws approval under sub-paragraph (4).(3)Where there is any alteration to the instrument establishing any approved pension fund or to any rules relating to any such fund, then the trustees of the fund in question shall immediately inform the Commissioner-General in writing of the alteration; and, if the Commissioner-General is not so informed, the approval of the fund in question shall be deemed to have been withdrawn as from the date of the alteration.(4)The Commissioner-General may at any time by notice in writing withdraw his approval of any approved pension fund, if in his opinion—(a)the conditions on which the approval of the fund in question was granted have not been complied with; or(b)there has been any alteration to the instrument establishing the fund in question or to any rules relating to it.(5)Where any approved pension fund ceases to be an approved fund, the provisions of section eighty-two shall nevertheless continue to apply in respect of the return of any contributions made while it was an approved fund.(6)The accounts of an approved pension fund shall be maintained in such form and for such periods as the Commissioner-General may determine.(7)References in sub-paragraphs (3) to (6), both inclusive, to approved pension fund shall be read and construed as including references to a pension fund within the meaning of paragraph (d) of the definition of approved fund; and fund shall be construed accordingly.4. Approval of annuity contracts and withdrawal of approval
(1)Where an individual in any charge year pays a premium under a contract providing for the payment to him of a life annuity (hereinafter referred to as an annuity contract) then he may apply for the contract to be approved by the Commissioner-General.(2)Subject to sub-paragraph (3), the Commissioner-General shall not approve an annuity contract unless he considers that the main object of such contract is the provision for the individual applying for its approval, of a life annuity in old age and unless the Commissioner-General is satisfied—(a)that the annuity contract is made in the Republic with an Insurance Company or body of Persons lawfully carrying on in the Republic the business of granting annuities on human life;(b)that the annuity contract provides for annual contributions by the individual throughout the currency of the contract; and(c)that the annuity contract does not—(i)provide for the payment during the life of the individual of any sum except sums payable to the individual by way of annuity, which may, subject to this paragraph, be commuted; or(ii)provide for the annuity payable to the individual to commence before he attains the age of 55 years or after he attains the age of 65 years; or(iii)provide for the payment of any other sums except sums payable by way of annuity to the individual's widow or widower and any sums which, in the event of no annuity becoming payable to the individual, are payable to the executors or administrators of the individual by way of return of premiums, by way of reasonable interest on premiums or by way of bonuses out of profits;(iv)provide for the annuity if any, payable to the individual's widow or widower to be of a greater annual amount than that paid or payable to the individual; or(v)provide for the payment of an annuity otherwise than for the life of the annuitant;(d)that the annuity contract does—(i)provide that no annuity payable under it shall be capable in whole or in part of surrender or assignment except as provided for in subparagraph (2) (d) (ii);(ii)provide that not more than one-third of any annuity payable under it to the individual may be commuted;(iii)provide that no annuity payable under it to the individual's widow or widower may be commuted:Provided that, save under such conditions as the Commissioner-General thinks proper to impose, no annuity contract shall be approved by the Commissioner-General if the individual is contributing to any approved pension fund or an approved fund within the meaning or paragraph (c) of the definition of approved fund.(3)The Commissioner-General may, in his discretion and subject to any conditions he thinks proper to impose, approve an annuity contract otherwise satisfying sub-paragraph (2) notwithstanding that such annuity contract was made by an individual resident in the Republic in a country other than the Republic with an insurance company or body of persons lawfully carrying on the business of granting annuities on human life before he became resident or that the annuity contract provides—(a)for the payment after the death of the individual applying for such approval of an annuity to a dependant not the widow or widower of the individual;(b)for the payment to the individual of an annuity commencing before he attains the age of 55 years, if the annuity is payable on his becoming incapable through infirmity of mind or body of carrying on his own occupation or any occupation of a similar nature for which he is trained or fitted;(c)if the individual's occupation is one in which persons customarily retire before attaining the age of 55 years, for the annuity to commence before he attains that age (but not before he attains the age of 50 years);(d)for the annuity payable to any individual to continue for a term certain (not exceeding 10 years) notwithstanding his death within that term or for the annuity payable to any individual to terminate or be suspended on marriage (or re-marriage) or in other circumstances;(e)in the case of an annuity which is to continue for a term certain, for the annuity to be assignable by will and, in the event of any individual dying entitled to it, for it to be assignable by executors or administrators in the distribution of the estate so as to give effect to a testamentary disposition, or to the rights of those entitled on intestacy, or to an appropriation of it to a legacy or to a share or interest in the estate.(4)The Commissioner-General may at any time, by notice in writing given to the persons by and to whom premiums are payable under any approved annuity contract, withdraw that approval on such grounds and from such date as may be specified in the notice.5. Approval of foreign fund or scheme established by law
(1)On receiving a claim for approval, the Commissioner-General may, in his discretion, and subject to any conditions he thinks proper to impose, approve a fund or scheme established by law in any other country, the main object of which is to provide for the payment under the rules relating thereto of pensions to its members on retirement from employment and, where any such fund or scheme is so approved, it shall be known as an approved pension fund.(2)The Commissioner-General may at any time withdraw approval of a fund approved under this paragraph.6. Appeals
Where under this Schedule the Commissioner-General may approve any pension fund or annuity contract (but Appeal not where he may approve thereof subject to any conditions) or may withdraw approval from any approved fund, then any person aggrieved by the refusal of the Commissioner-General to grant his approval or by the withdrawal of any approval already granted, may appeal therefrom as if the refusal or withdrawal of approval were a determination and such an appeal shall be heard accordingly.7. Remoteness
The Commissioner-General's approval for the purposes of this Schedule is not subject to any rule of law against remoteness, and in any case is without prejudice to any such rule.Fifth Schedule (Section 33)
Capital allowance for buildings, implements, machinery and plant, and premiums
Part I – Buildings
1. Definition of industrial building
(1)In this Part an industrial building means a building or structure in use for the purposes of any electricity, gas, water, inland navigation, transport, hydraulic power, bridge or tunnel undertaking, or any like undertaking of public utility, or is in use for the purposes of any trade which—(a)is carried on in a mill, factory or like premises;(b)consists of the manufacture of goods or materials, or their subjection to any process;(c)consists of the storage of goods or materials to be used in the manufacture or processing of other goods;(d)consists of the storage of goods on import or for export; or(e)consists in the working of a mine or well for the extraction of natural deposits.(2)For the purposes of this Part, the expression "industrial building" does not, save as provided in sub-paragraphs (3) and (4), include any building or structure in use as, or as part of or ancillary to the purposes of, a dwelling-house, retail shop, showroom, hotel or office, or in use for the purposes of any retail, repair or servicing trade or a trade of a like nature.(3)Any building which on first construction after the commencement of this Act is an hotel, or which is an extension made after the commencement of this Act to a building first constructed as an hotel and which is certified by that body of the Government for the time being responsible for the hotel industry as conforming to such standards as it may from time to time prescribe, is an industrial building for the purposes of this Part.(4)Any building constructed or acquired by a person for business purposes, the cost of which exceeds two million kwacha, shall be deemed to be an industrial building for the purposes of this part.(5)Any building in use for the welfare of employees engaged in the undertakings and trades referred to in sub-paragraph (1) is an industrial building for the purposes of this Part.(6)This paragraph applies to a part of an undertaking or trade as it applies to an undertaking or trade.(7)Where a part of a building is an industrial building, and a part is not, and the capital expenditure incurred on the latter part is not more than ten per centum of such expenditure incurred on the whole building, the whole building is an industrial building for the purposes of this Part.2. Definition of commercial building
In this Part, a commercial building means a building or structure, or part thereof, which is not an industrial building as defined in paragraph 1, or farm improvement or farm works as defined in the Sixth Schedule, and which is in use for the purposes of any business:Provided that the construction of such building or structure is completed for first use on or after the 1st April, 1969.3. Initial allowance for industrial buildings
(1)In ascertaining the business profits of a person who, for the purposes of his business, has incurred capital expenditure on the construction of a building intended to be used as an industrial building, or on an addition to or an alteration of an industrial building, a deduction (called an initial allowance) of the percentage of the expenditure incurred, as set out in Part V, is allowed in the charge year in which the said building, addition to or alteration is brought into use as an industrial building.(2)Capital expenditure amounting to the cost of acquisition is incurred by a person for the purpose of sub-paragraph (1) where he—(a)acquires the building from another person who constructed it in the course of his trade; and(b)is the first user of that building.4. Wear and tear allowance for buildings
(1)In ascertaining for any charge year the business profits of any person who in that year uses for the purposes of his business an industrial or commercial building which he acquired, constructed, added to or altered, a deduction shall be allowed (called a wear and tear allowance) for each charge year of such use according to the case and at the percentage, as set out in Part V, of the original cost to such person:Provided that in no case shall the total of all the deductions allowed to such person under this Part exceed the cost to such person of such acquisition, construction, addition or alteration, as the case may be.(2)Where a building is used by a person as an industrial building for part of a charge year and as a commercial building for another part of the same charge year, that building shall be regarded as used by that person solely as an industrial building for that charge year.(3)No allowance shall be deductible under this paragraph in ascertaining the business profits of any person for any charge year in respect of any building if at any time during the said charge year that building is used as his usual dwelling place by—(a)any individual who uses such building for the purposes of the business, or by any individual partner in such business;(b)any individual who, by reason of his shareholdings, or of his control of shareholdings, in any company or by reason of any partnership interest, is in a position to exercise control, directly or indirectly, over the person or persons using the building for the purposes of the business;(c)a director of a company using the building for the purposes of its business, who is not a whole time service director thereof.5. Balancing allowance for buildings
(1)Where any building, in respect of which an initial or wear and tear allowance has been or could have been deducted in ascertaining the profits of a person carrying on a business, ceases to belong to that person or permanently ceases to be used by him for the purposes of any business whatsoever, a deduction (called a balancing allowance) shall for be allowed in ascertaining the profits of the business for the purposes of which the said building was last used for the charge year of such cessation.(2)The balancing allowance deductible under sub-paragraph (1) in respect of a building shall be equal to the amount by which any recovery of capital expenditure on that building together with any initial or wear and tear allowance deducted under this Part in respect of that building falls short of the original cost of that building to the person referred to in that sub-paragraph:Provided that where wear and tear allowance has been deducted for part only of the entire period of ownership or possession of the building by the person who has been allowed the deduction of the said wear and tear allowance, the allowance deductible shall be determined by multiplying the balancing allowance as above calculated by the number of years in respect of which wear and tear allowance has been deducted and dividing the result by the number of years of the said ownership or possession.(3)In calculating the balancing allowance in respect of any building upon any cessation referred to in sub-paragraph (1), the recovery from capital expenditure on the building shall be the amount which, according to the Commissioner-General's determination, it would have realised in the open market at the time of the cessation.6. Divided use
If any building is used by a person both for the purposes of his business and for other purposes, the amount of any allowance provided by this Part shall be reduced according to the Commissioner-General's determination.Part II – Implements, machinery and plant
7. Business to include employment in this Part
Notwithstanding the definition of "business" as contained in section two, for the purposes of this Part "business" includes employment and the letting of property.8. Frequently replaceable articles not within this Part
This Part does not apply to implements requiring frequent replacement.10. Wear and tear allowance for implements, machinery and plant
(1)Where a person has used any implements, machinery or plant belonging to him for the purposes of his business a deduction (called a wear and tear allowance) shall be allowed in ascertaining the profits of the business for each charge year.(2)Where a person holds any implements, machinery or plant under a hire-purchase agreement as defined in the Hire-Purchase Act, then the implement, machinery or plant shall be deemed to belong to that person for the purposes of this paragraph.(3)The wear and tear allowance for any charge year shall be at the percentage and in the cases set out in Part V:Provided that in the charge year in which the business ceases the allowance shall be the amount of the residue of the original cost referred to in sub-paragraph (4).(4)The wear and tear allowance for any charge year shall be calculated on a straight line basis of the original cost of the implements, machinery and plant:Provided that in the case of any implements, machinery or plant which were acquired by a person other than for the purpose of a business, the original cost shall be the current market value of such implements, machinery or plant as determined by the Commissioner-General in the charge year that they are first used for the purpose of a business.(5)Notwithstanding any other provisions of this Act to the contrary the wear and tear allowance on any implement, machinery or plant which has been exclusively used in farming manufacturing or tourism for any charge year shall be calculated on a straight-line basis at the rate of fifty per centum of the cost.(6)Notwithstanding any other provisions of this Act, the wear and tear allowance on the cost of any new plant or machinery acquired and used by any soft drinks manufacturer in respect of such business carried on by him in a rural area, shall, in any charge year, be calculated on a straight-line basis at the rate of twenty per centum of the cost of such plant and machinery.11. Capital recoveries for implements, machinery and plant
For the purpose of paragraph 10—(a)a recovery from capital expenditure on implements, machinery or plant shall be deemed to have taken place when the implements, machinery or plant—(i)permanently cease to be used for the purposes of a business; or(ii)cease to belong to the person carrying on a business;(b)the amount of the recovery from capital expenditure shall be the amount which, according to the Commissioner-General's determination, the implements, machinery or plant would have realised in the open market at the time the event giving rise to the recovery occurred.12. Divided use
If any implement, machinery or plant is used by a person both for the purposes of his business and for other purposes, the amount of any allowance provided for by this Part shall be reduced to the Commissioner-General's determination.13. Valuation in exceptional circumstances
(1)In the calculation of any allowance under this Part, the original cost to any person of any implement, machinery or plant that has been—(a)used outside the Republic by him, and brought by him to the Republic for the purposes of his business;(b)used by him for a purpose other than the purposes of his business, and is then used for the purposes of his business; or(c)acquired by him for no valuable consideration;is according to the Commissioner-General's determination.(2)For the purposes of this Part, the original cost to any person of a road vehicle used for the purposes of his business and the vehicle was acquired by the person after the commencement of this Act, whether the vehicle is a commercial vehicle or otherwise, shall be used in the calculation of the allowance.(3)In this paragraph, "commercial vehicle" means a road vehicle of a type not commonly used as private vehicle and unsuitable to be used as such but includes all types of road vehicles used solely for hire or carriage of the public for reward.Part III – Premium allowance
14. Deduction of premium allowance
(1)A deduction is allowed (called a premium allowance) in ascertaining the profits of a person's business equal to the amount of any premium or like consideration paid by him for the right of use of machinery or plant, or for the use of any patent, design, trade mark or copyright, or for the use of other property which the Commissioner-General determines is of a like nature, where such right is used by that person for the purposes of his business.(2)The amount of any deduction allowed for any charge year under sub-paragraph (1) shall not exceed the amount of the premium or like consideration divided by the number of years for which the right of use is granted.(3)Where a person acquires any interest in the ownership of property for payment of a premium or like consideration for the right of use of which he has been allowed a deduction under sub-paragraph (1), he ceases to be allowed that deduction as from the date of such acquisition.Part IV – General provisions
15. Successions
(1)Where a person succeeds to another person's business, or there is a change in any partnership engaged in business, any property which immediately before the succession or change was in use for the purposes of the business, and, without being sold, is in such use immediately afterwards, is, for the purposes of this Schedule, treated as if it had been sold for an open market price as determined by the Commissioner-General at the time of the succession or change to the person carrying on the business immediately afterwards; but no initial allowance under this Schedule shall be deducted by virtue of this paragraph.(2)Where there is succession or change in terms of sub-paragraph (1), and notwithstanding that sub-paragraph, the Commissioner-General may, upon the written application of the parties concerned, make such adjustments in relation to the allowances which may be deducted under this Schedule as will provide for the continuity of those allowances in relation to the business the subject of the succession or change, but in any event any such adjustment is subject and according to the Commissioner-General's discretion.16. Subsidies
For the purposes of this Schedule, the amount of any capital expenditure is reduced by the amount of any subsidy or grant from public funds towards or in aid or in recognition of the object of such expenditure.17. Controlled sales
(1)This paragraph has effect in relation to the transfer by sale or otherwise of any property in respect of which any deductions have been allowed under Parts I, II and III, where either—(a)the transferee has control of the transferor, or the transferor has control of the transferee, or some other person has control of both; or(b)the Commissioner-General determines by reference to the consideration given for the property that the transfer was not at arm's length.(2)Where any property as is mentioned in sub-paragraph (1) is transferred other than at a price that it would have fetched if sold in the open market, then, subject to sub-paragraph (3), the like consequences shall ensue as would have ensued if the property had been sold for the price which it would have fetched if sold in the open market.(3)Where the transfer is one to which sub-paragraph (1) (a) applies and the transferee uses the property transferred for the purposes of a business, then, subject to the parties to the transfer by notice in writing to the Commissioner-General so electing, sub-paragraph (2) shall not have effect, but the like consequences shall ensue as would have ensued if the property had been transferred for a sum equal to the residue of capital expenditure on the property still undeducted immediately before the transfer, and, in the case of such an election—(a)no initial allowance shall be deducted in respect of the transferee; and(b)in respect of a subsequent sale or cessation of use of the property for the purposes of the business by the transferee, the amount included in his income as a capital recovery shall be such an amount as would have been included in the transferor's income in a like case but for the transfer, and as if the transferor had been allowed all such deductions in respect of the property as were, in fact, allowed to the transferee.Part V – Rates of initial and wear and tear allowances
18. Rates of initial and wear and tear allowances
Underparagraph 3—initial allowance for industrial buildingsten per centumUnderparagraph 4—wear and tear allowance for industrial buildings, in the case of low cost housingten per centumand for other industrial buildingsfive per centumand for commercial buildingstwo per centumUnderparagraph 10—Wear and tear for implements, machinery and plant including Commercial Vehiclestwenty-five per centumWear and tear for vehicles other than Commercial Vehiclestwenty per centumPart VI – Mining deductions
19. Interpretation of terms
In this Part unless the context otherwise requires—"capital expenditure" means expenditure, in relation to mining or prospecting operations—(a)on buildings, works, railway lines or equipment;(b)on shaft sinking, including expenditure on pumps, pumps chambers, stations and ore bins accessory to a shaft;(c)on the purchase of or on the payment of a premium for the use of any patent, design, trade-mark, process or other expenditure of a similar nature;(d)incurred prior to the commencement of production or during any period of non-production on preliminary surveys, boreholes, development or management, or;(e)by way of interest payable on any loan for mining or prospecting purposes;"deemed loss" means a deduction allowable in accordance with section twenty-one;"equity" means in relation to a company limited by shares—(a)issued ordinary share capital or stock, but only to the extent that such share capital or stock is paid up;(b)issued, deferred, preferred, preference or other priority share capital or stock, but only to the extent that such share capital or stock is paid up and provided that such share capital or stock carries no rights of early repayment on demand;(c)capital reserves in so far as they are not capable of distribution except either by way of diminution of capital or by addition to issued capital; and(d)revenue reserves to the extent that they have remained constant throughout the previous twelve months;but does not include—(i)loan stock or debentures whether carrying conversion rights or not;(ii)bank overdrafts or other drawing facilities;"estimate of life" means the number of years not exceeding in relation to a mine—(a)in the case of a mine operated for the purpose of producing lead or zinc, ten years; and(b)in the case of any other mine, twenty years, during which mining operations at the mine may be expected to continue after the beginning of the charge year;"expenditure" means net expenditure after taking into account any rebates, returns or recoveries from expenditure;"pre-production expenditure" means capital expenditure incurred in charge years prior to the production charge year;"production commencement date" means in relation to a mine, the latest of any of the following dates:(a)the date on which the mine first commenced regular production;(b)where the mine, having previously been in production, was closed down and then re-opened, the date on which it first recommenced regular production; or(c)where the mine has changed ownership and has been reorganised with substantially new development and new plant, the date on which it first commenced regular production after such reorganisation;"production charge year" means the charge year in which a 1953, 1970 or 1975 new mine first commences or recommences regular production;"prospecting expenditure" means expenditure incurred in relation to prospecting operations, including, any capital expenditure incurred in connection with such operations, and such expenditure as the Commissioner-General determines to be ancillary to expenditure on prospecting operations;"1953 new mine", means a mine whose production commencement date is later than 31st March, 1953 but not later than 31st March 1970;"1970 new mine" means a mine whose production commencement date is later than 31st March, 1970 but not later than 31st March, 1975;"1975 new mine" means a mine whose production commencement date is later than 31st March, 1975.20. Capital expenditure deductions
There shall be no capital expenditure deduction allowed except under the provisions of this Part.21. Prospecting expenditure deductions
(1)Subject to the other provisions of this paragraph, the amount of prospecting expenditure incurred by a person in a charge year in respect of an area in Zambia over which a mining right has been granted shall be allowed as a deduction to that person.(2)A company that is entitled may, by notice in writing given to the Commissioner-General within twelve months after the end of the charge year in which the expenditure is incurred, irrevocably elect to forego the deduction in favour of its shareholders; whereupon the deductions shall be allowed, not to the company but to its shareholders instead, in proportion to the calls on shares paid by them during the relevant accounting period or in such other proportions as the Commissioner-General having regard to any special circumstances, may determine:Provided that this sub-paragraph shall not apply to a company carrying on mining operations in Zambia.(3)Where—(a)a company (in this sub-paragraph called "the parent company") is entitled and under this paragraph to a deduction; and(b)subsequent to the date the expenditure is incurred, a new company, of which the parent company is a shareholder, is incorporated for the purpose of—(i)continuing the prospecting operations of the parent company; or(ii)carrying on mining operations in the Republic; andthe parent company may, by notice in writing given to the Commissioner-General within twelve months after the incorporation of the new company, irrevocably elect to forego the deduction in favour of the new company but to the new company instead:Provided that this sub-paragraph shall not apply—(i)to a company carrying on mining operations in Zambia; or(ii)in respect of expenditure incurred after the new company takes over the prospecting operations of the parent company or commences to carry on mining operations.(4)A deduction allowable under this paragraph shall be deemed to be a loss and shall be allowed, in accordance with section thirty of the Income Tax Act as a loss incurred—(a)in the case of sub-paragraphs (1) and (2), in the charge year in which the expenditure is incurred; and(b)in the case of sub-paragraph (3), in the charge year in which the new company takes over the prospecting or exploration operations or commences to carry on mining operations:Provided that where the deemed loss exceeds the income of the person for the charge year in which it is incurred, the excess shall be deemed to be a loss incurred in the following charge year and so on from year to year until the deemed loss is extinguished.(5)In computing a loss incurred by the operator of a 1975 new mine in any charge year, prospecting expenditure incurred in relation to the mine and allowable as a deduction shall be deemed to be deducted last.22. Mining expenditure deductions
(1)Subject to the other provisions of this paragraph and the provisions of paragraph (5), a deduction shall be allowed in determining the gains or profits from carrying on of mining operations by any person in charge year in respect of the capital expendure incurred by the person on a mine which is in regular production in the charge year.(2)The deduction to be allowed for a charge year in the case of a 1975 new mine company shall be—(a)where the charge year is in the production charge year, the sum of the pre-production expenditure, to the extent that such expenditure has not already been allowed as a deduction and the capital expenditure incurred in the production year:Provided that where, on the last day of any charge year prior to the production expenditure incurred in such charge year exceeds the amount remaining after deducting from the equity of the company on such day the prospecting expenditure incurred in such charge year and in all previous charge years on such day and allowable as a deemed loss, the excess shall not be so increased for such charge year; and(b)where the charge year is a charge year subsequent to the production charge year, the capital expenditure incurred in such charge year.(3)The deduction to be allowed for a charge year in the case of a 1970 new mine shall be—(a)where the charge year is the production charge year, the total capital expenditure incurred on the mine up to the end of the production charge year, to the extent that such expenditure has not already been allowed as deduction; and(b)where the charge year is a charge year subsequent to the production charge year, the capital expenditure incurred on the mine in such charge year.(4)The deduction to be allowed for any charge year in the case of a 1953 new mine shall be the sum of—(a)the fraction of any unredeemed capital expenditure on the mine at the commencement of the charge year ended 31st March, 1971, that would have been allowed in such charge year under the provisions of paragraph twenty-three of Part VI of the Fifth Schedule to the Income Tax Act, as in force on 31st March, 1970, had those provisions not been repealed;(b)the capital expenditure incurred on the mine in such charge year.(5)The deduction to be allowed for any charge year in the case of any other mine shall be—(a)one-twentieth or, in the case of a mine operated for the purposes of producing lead or zinc, one-eighth of the balance of unredeemed capital expenditure on the mine, including any balance which deductions were previously claimed under Parts I to V of the Fifth Schedule to the Income Tax Act, at the commencement of the charge year ended 31st March, 1971, until such balance is extinguished; and(b)an amount obtained by taking the sum of—(i)the balance of the capital expenditure on the mine incurred after 22nd September, 1973 and unredeemed at the commencement of such charge year; and(ii)the capital expenditure on the mine incurred in such charge year;and dividing the sum so obtained by the number of years in the approved estimate of the life of the mine:Provided that where separate and distinct mining operations are carried on in mines which are not contiguous, the deduction allowable shall be calculated separately according to the approved estimate of the life of each mine.(6)For the purposes of sub-paragraph (5) the approved estimate of the life of the mine at the commencement of the charge year shall be based on the certified estimates of ore reserves of the mine and supported by calculations showing how the estimates have been arrived at as submitted in writing by the person carrying on the mining operations:Provided that if the Commissioner-General does not approve the estimate of the life of the mine as submitted, the approved estimate of the life of the mine shall be as the Commissioner-General determines.(7)The deduction for any interest on borrowings to be allowed in any charge year shall not exceed the interest on any borrowings in excess of a loan-to-equity ration of 2:1.23. Deductions for mining expenditure on non-producing and non-contiguous mine
Where a person is carrying on mining operations in a mine which is in regular production and is also the owner of, or has the right to work, a mine which is not contiguous with the producing mine and from which the person has a loss in the charge year, the amount of such loss may be deducted in ascertaining the gains or profits from his mining operations in that charge year:Provided that the amount of tax which would otherwise be payable by such person in such charge year is not reduced by more than twenty per centum as a result of this deduction.24. Deductions on cessation of mining operations
Where a mine ceases regular production due to the expiration of the life of the mine, or where the mining right has ended, or for any other reason acceptable to the Commissioner-General, and the person who was carrying on the mining operations irrevocably so elects, by notice in writing to the Commissioner-General, within twelve months after the end of the charge year in which the mine ceased regular production, the deduction allowable in ascertaining the gains or profits from the carrying on of the mining operations in respect of the capital expenditure on the mine for each of the last six charge years in which the mine was in regular production shall be an amount arrived at by taking the sum of—(a)the unredeemed capital expenditure on the mine at the commencement of the six charge years; and(b)the capital expenditure on the mine incurred in the six charge years; and dividing the sum so obtained by six.25. Change of ownership of mine
Subject to the provisions of paragraph 26, when change in the ownership of a mine takes place, the consideration for the assets which qualify, for the purposes of this Part, as capital expenditure shall, for income tax owners purposes—(a)be allowable as capital expenditure incurred by the new owner; and(b)be deemed to be a capital recovery by the previous owner in the charge year in which the change takes place.26. Controlled sales
(1)Whenever there is a change in the ownership of a mine, this paragraph shall have effect in relation to the sale of any property in respect of which any deductions have been allowed under this Schedule in any case where either—(a)the buyer has control of the seller, or the seller has control of the buyer, or some other person has control of both; or(b)the Commission-General determines, by reference to the consideration given for the property, that the same was not at arm's length.(2)Where the property is sold at a price other than what it would have fetched if sold in the open market, then, subject to the provisions of sub-paragraph (3), the same consequences shall ensue as would have ensued if the property had been sold for the price which it would have fetched if sold in the open market.(3)Where the sale is one to which clause (a) of sub-paragraph (1) applies and the parties to the sale irrevocably so elect, by notice in writing to the Commissioner-General, then sub-paragraph (2) shall not have effect but, instead, the same consequences shall ensue as would have ensued if the property had been sold for a sum equal to the residue of capital expenditure on the property still unredeemed immediately before the sale.27. Petroleum operations
(1)Nothing in this Part shall apply to petroleum operations.(2)The Minister may, by statutory instrument, make provisions regulating deductions in connection with petroleum operations.Sixth Schedule (Section 33)
Farming improvement and works allowances and livestock valuation
Part I – Farm improvement allowance
1. Definitions
In this Part—"farm dwelling" means a permanent building, used as a dwelling (the original cost of which is taken for the purposes of this Part as not in excess of one million kwacha), which is not used by the farmer claiming the allowance under this Part as the homestead of himself and his family; and"farm improvement" means any permanent work, including a farm dwelling and fencing appropriate to farming and any building constructed for and used for the welfare of, employees, and in relation to farming land owned or occupied by the farmer claiming the allowance under this Part for ascertainment of his profit.NOTE: Restriction of cost under the definition of "farm dwelling" has been as follows—with effect from 1st April, 19666,000with effect from 1st April, 19808,000with effect from 1st April, 198720,000with effect from 1st April, 1995200,000with effect from 1st April, 19961,000,0002. Farm improvement allowance
For any expenditure incurred in a charge year on farm improvements, a deduction called improvement allowance shall be allowed in determining the profits of the farming business for the charge year.3. Divided use
Where the expenditure referred to in paragraph 2 partly in respect of a farm improvement, and partly in respect of some other purposes, only such proprotion of that expenditure as the Commissioner-General may determine is taken into account for the purposes of that paragraph.Part II – Farm works allowance
5. Nature of farm works
The deduction under this Part (called the farm works allowance) is allowed to a farmer in respect of expenditure on farming land in his ownership or occupation and for the purposes of farming, on stumping and clearing, works for the prevention of soil erosion, boreholes, wells, aerial and geophysical surveys, and water conservation (in this Part collectively referred to as "farm works").6. Farm works allowance
The expenditure incurred by any person for any charge year in respect of any farm works is allowed as a deduction in ascertaining the profits of his farming business for that year:Provided that where the person incurs the expenditure in a charge year prior to the charge year in which he commences farming operations the expenditure shall be allowed as a deduction in the charge year in which he commences farming operations.Part III – Valuation of livestock
7. Standard value
(1)In ascertaining a farmer's gains or profits the value of his livestock (other than livestock bought by him for stud) is the standard value or if he so irrevocably elects, whichever is the lower of the market value or the cost to him of the value livestock.(2)The standard value for the purposes of this paragraph applicable to any class of livestock shall be that adopted by the farmer in the first return delivered by him after he commences farming, if the Commissioner-General determines that such value may be approved and that standard value shall not be varied for the purposes of any subsequent charge year unless the Commissioner-General so determines, and subject to any conditions he may impose on such determination.(3)For the purpose of this paragraph and paragraph 7 of the First Schedule the value of livestock bought for stud shall be the cost price or market value whichever is the lower.Part IV – General provisions
8. Subsidy
For the purposes of this Schedule the amount of any capital expenditure incurred in respect of farm improvement to which Part I applies for expenditure incurred in respect of farm works to which Part II applies is reduced by the amount of any subsidy or grant from public funds towards or in aid or in recognition of the object of such expenditure.Seventh Schedule (Section 117)
Transitional provisions
Eighth Schedule (Section 77(2))
Payment of provisional tax
Charging Schedule (Section 14))
Part I – Personal allowances and tax credits
1. Claims and rates
(1)Subject to the provisions of this Part, an individual resident in the Republic who for any charge year has furnished a return of income and makes a claim in that behalf giving such particulars, and supported by such proof, as the Commissioner-General may require, shall, in respect of that charge year, be entitled to such personal allowances and tax credits as are appropriate to his case in accordance with the Table contained in Annexure "A" to this Schedule:Provided that—(i)such individual shall be provisionally entitled to such personal allowances and tax credits:(a)for the purposes of section seventy-one, and regulation 7 of the Income Tax (Employment) Regulations, if he is a public servant or if he has completed a claim for the immediately preceding charge year in accordance with paragraph 1; or(b)for the purposes of section forty-six A if he has provided an estimate of income tax liability for such charge year;(ii)such return and claim is made not later than six years after the end of the charge year to which it relates or, if later, six years after the date of service of a notice of assessment for that charge year;(iii)where the individual was not resident in the Republic for the previous charge year or is not resident in the Republic for the subsequent charge year, the personal allowances to which he is entitled under this Part shall be reduced by one-twelfth for each complete month for which he does not reside in the Republic in the charge year; and(iv)where the emoluments of a claimant are not liable to tax in the Republic, the allowances to which the claimant is entitled shall not exceed the amount of the income, excluding income classified in subsection (1) of section nineteen, which is liable to tax in the Republic.(2)In this Part, "claimant" means an individual who claims personal allowances and tax credits pursuant to section fourteen of this Act.8. Non-resident: world income election
(1)A claimant who is not resident in the Republic may elect that the tax chargeable in the Republic on his income other than the income which the Commissioner-General is prohibited from including in an assessment, shall be reduced to the extent that it shall not exceed the amount of tax which bears the same proportion to the tax which would be chargeable if the claimant's world income were chargeable under this Act (after allowing the personal allowances to which he would be entitled if he were resident in the Republic, but without taking account of double taxation relief under Part VII of the Act as the claimant's assessable income bears to his world income.(2)An election under this paragraph shall be made in the same manner and subject to the same conditions as a claim for personal allowances and tax credits.(3)In sub-paragraph (1), "world income" means the total amount of claimant's income from all sources, excluding the income which is chargeable to tax but which the Commissioner-General is prohibited from including in an assessment, the amount of income from each source being substantiated to the Commissioner-General's satisfaction.8A. Handicapped person's credit
Where the individual, or spouse of the individual who at any time during the charge year lives with that individual, is a handicapped person, there shall be an abatement of the tax due under this Act by the amount of the handicapped credit shown in Annexure "A".Part II – Individual tax credit
9. Individual tax credit
(1)For any individual there shall be an abatement of tax due under this Act by the amount of the individual tax credit shown in Annexure "A".(2)Where the individual is not a resident of the Republic for part or all of the charge year, the individual tax credit will be for each complete month in the charge year for which he does not reside in the Republic.(3)For the purpose of this Part the entitlement of a husband and wife shall be separately determined.(4)The amount of the individual tax credit provided by this Part shall be in lieu of any personal allowances.Part III – Rates of tax
10. Individuals
(1)Subject to the provisions of sub-paragraph (2) and of paragraphs 13, 14, 15 and 16, the tax with which an individual shall be charged for a charge year:(a)on income received by way of lump sum payments, shall be calculated at the rate specified for such charge year contained in Part I of Annexure "B" to this Schedule;(b)on the balance of his income (except income charged under sub-paragraphs (a), (b), (c) and (e) after the deduction of personal allowances appropriate to his case), shall be calculated at the relevant rates specified for such income in the Table appropriate to such charge year contained in Part II of Annexure "B" to this Schedule:Provided that—(i)the tax chargeable on income received from a rural enterprise, for each of the first five charge year for which such business is carried on, shall be reduced by such amount as is equal to one-seventh of the tax which would otherwise be so chargeable on such business income;(ii)the maximum rate on income received from farming shall be fifteen per centum;(iii)the maximum rate of tax on that portion of income which is determined by the Commissioner-General as originating from the export of non-traditional products shall be fifteen per centum; and(v)the maximum rate of tax on the balance of income received under subsection (5) of section twenty-one shall be ten per centum.(c)on the balance of any income deemed to be his pursuant to subsection (1) of section nineteen arising from any business, excluding the letting of property, or from any employment (except any such income charged under sub-paragraphs (a) or (e), after the deduction of any personal allowances appropriate to his case which it has not been possible to deduct from income charged under sub-paragraph (b), shall be calculated at the relevant rates specified for such income in the Table appropriate to such charge year contained in Part II of Annexure "B" to this Schedule:Provided that—(i)the tax chargeable on income received from a rural enterprise, for each of the first five charge years for which such business is carried on shall, be reduced by such amount as is equal to one-seventh of the tax which would otherwise be so chargeable on such business income;(ii)the maximum rate of tax on income received from farming shall be fifteen per centum;(iii)the maximum rate of tax on that portion of income which is determined by the Commissioner-General as originating from the export of non-traditional products shall be fifteen per centum.(d)on the balance of income received by way of gratuity as provided by section twenty-one (except any such income charged under sub-paragraph (e), after the deduction of any personal allowances appropriate to his case which it has not been possible to deduct from income charged under sub-paragraphs (b) and (c), shall be calculated at the relevant rates specified for such income in the Table appropriate to such charge year contained in Part II of Annexure "B" to this Schedule.11. Persons other than individuals, trusts, deceaseds' estates and bankrupts' estates
Subject to the provisions of paragraph 13, 14, 15 and 16 the tax with which a person other than an individual, a trust, a deceased's estate or a bankrupt's estate, shall be charged on income for a charge year shall be calculated at the relevant rates specified for such income in the Table appropriate to such charge year contained in Annexure "C" to this ScheduleProvided that—(i)the tax chargeable on income received from a rural enterprise for each of the first five charge years for which such business is carried on, shall be reduced by such amount as is equal to one-seventh of the tax which would otherwise be so chargeable on such business income;(ii)the rate of tax on income received from farming shall be fifteen per centum;(the rate for the year ended 31st March, 1982 was twenty-five per centum)(iii)the maximum rate of tax on that portion of income which is determined by the Commissioner-General as originating from export of non-traditional products shall be fifteen per centum;(iv)the rate of tax on income received by a company listed on the Lusaka Stock Exchange, shall be thirty per centum.12. Trusts, deceaseds' estates and bankrupts' estates
Subject to the provisions of paragraphs 13, 14, 15 and 16 the tax with which a trust or a bankrupt's estate shall be charged on income for a charge year shall be calculated at the relevant rates specified for such income in the Table appropriate to such charge year contained in Annexure "D" to this Schedule.14. Management and consultant fees
Subject to the provisions of any agreement made under section seventy-four, the tax with which a person shall be charged for a charge year on Management or Consultancy fees which the Commissioner-General is prohibited from including in an assessment under the provisos to subsection (1) of section sixty-three, shall be at the rate specified in the Table appropriate to that charge year as set forth in Annexure "K" to this Schedule.15. Interest and royalties
Subject to the provisions of any agreement made under section seventy-four, the tax with which a person shall be charged for a charge year on interest and royalties which the Commissioner-General is prohibited from including in an assessment under the provisos to subsection (1) of section sixty-three, shall be at the rate specified in the Table appropriate to such charge year contained in Annexure "G" to this Schedule.16. Dividends
Subject to the provisions of any agreement made under section seventy-four, the tax with which a person shall be charged for a charge year in the case of a person who is not resident in the Republic or a Company incorporated in the Republic on dividends which the Commissioner-General is prohibited from including in an assessment under the provisions of sub-paragraphs (i) and (ii) of the proviso to subsection (1) of section sixty-three shall be at the rate specified in the Table appropriate to such charge year contained in Annexure "H" to this Schedule.Annexures
APersonal Allowances Deduction.BRates for Individuals, Parts I, II, III, IV and V.CRates for Persons other than Individuals, Trusts, Deceased's and Bankrupt's Estate.DRates for Trusts, Deceased's Estates and Bankrupt's Estate.ERates for Public Entertainment Fees.FRates for Large Scale Mining.GRates for Interest and Royalties.JRates for Contractors and Suppliers (under section eighty-one A)KRates for Management and Consultancy FeesAnnexure "A"
Part I – Personal allowance deduction
(Paragraph 9)
Table1 with effect from 1st April, 1969| (a) | Married allowance under paragraph 2 | K1,300 |
| (b) | Family allowance under paragraph 3 (subject to apportionmentpursuant to sub-paragraph (3) of paragraph 3) | K450 |
| (c) | Single allowance under paragraph 4 | K450 |
| (d) | Child allowance under paragraph 5 (subject to apportionmentpursuant to sub-paragraph (2) of paragraph 5) | K180 |
| (e) | Insurance allowance under paragraph 620% of premiums up to maximum allowance of | K300 |
| (f) | Non-resident allowance under paragraph 6 | K600 |
| (a) | Married allowance under paragraph 2 | K1,300 |
| (b) | Family allowance under paragraph 3 (subject to apportionment pursuant to sub-paragraph (3) of paragraph 3) | K450 |
| (c) | Single allowance under paragraph 4 | K500 |
| (d) | Child allowance under paragraph 5 (subject to apportionment pursuant to sub-paragraph (2) of paragraph 5) | K180 |
| (e) | Insurance allowance under paragraph 620% of premiums up to maximum allowance of | K300 |
| (f) | Non-resident allowance under paragraph 6 | K400 |
| (g) | Handicapped persons allowance under paragraph 8A | K400 |
| (a) | Married allowance under paragraph 2 | K1,000 |
| (b) | Single allowance under paragraph 4 | K500 |
| (c) | Child allowance under paragraph 5 (subject to apportionmentpursuant to sub-paragraph (2) of paragraph 5) | K180 |
| (d) | Insurance allowance under paragraph 620% of premiums up to maximum allowance of | K300 |
| (e) | Handicapped persons allowance under paragraph 8A | K600 |
| (a) | Married allowance under paragraph 2 | K1,000 |
| (b) | Single allowance under paragraph 4 | K500 |
| (c) | Child allowance under paragraph 5 (subject to apportionmentpursuant to sub-paragraph (2) of paragraph 5) | K200 |
| (d) | Insurance allowance under paragraph 620% of premiums up to maximum allowance of | K300 |
| (e) | Handicapped persons allowance under paragraph 8A | K500 |
| (a) | Married allowance under paragraph 2 | K1,000 |
| (b) | Single allowance under paragraph 4 | K500 |
| (c) | Child allowance under paragraph 5 (subject to apportionmentpursuant to sub-paragraph (2) of paragraph 5) | K225 |
| (d) | Insurance allowance under paragraph 620% of premiums up to maximum allowance of | K500 |
| (e) | Handicapped persons allowance under paragraph 8A | K500 |
| (a) | Married allowance under paragraph 2 | K1,000 |
| (b) | Single allowance under paragraph 4 | K500 |
| (c) | Child allowance under paragraph 5 (subject to apportionmentpursuant to sub-paragraph (2) of paragraph 5) | K225 |
| (d) | Insurance allowance under paragraph 620% of premiums up to maximum allowance of | K300 |
| (e) | Handicapped persons allowance under paragraph 8A | K500 |
| (a) | Married allowance under paragraph 2 | K1,500 |
| (b) | Single allowance under paragraph 4 | K600 |
| (c) | Child allowance under paragraph 5 (subject to apportionmentpursuant to sub-paragraph (2) of paragraph 5) | K225 |
| (d) | Insurance allowance under paragraph 620% of premiums up to maximum allowance of | K400 |
| (e) | Handicapped persons allowance under paragraph 8A | K500 |
| (a) | Married allowance under paragraph 2 | K1,700 |
| (b) | Single allowance under paragraph 4 | K650 |
| (c) | Child allowance under paragraph 5 (subject to apportionmentpursuant to sub-paragraph (2) of paragraph 5) | K325 |
| (d) | Insurance allowance under paragraph 6The amount of premiums up to maximum of | K600 |
| (e) | Handicapped persons allowance under paragraph 8A | K600 |
| (a) | Married allowance under paragraph 2 | K1,700 |
| (b) | Single allowance under paragraph 4 | K650 |
| (c) | Child allowance under paragraph 5 (subject to apportionmentpursuant to sub-paragraph (2) of paragraph 5) | K325 |
| (d) | Insurance allowance under paragraph 6The amount of premiums up to maximum of | K400 |
| (e) | Handicapped persons allowance under paragraph 8A | K600 |
| (a) | Married allowance under paragraph 2 | K2,100 |
| (b) | Single allowance under paragraph 4 | K900 |
| (c) | Child allowance under paragraph 5 (subject to apportionmentpursuant to sub-paragraph (2) of paragraph 5) | K325 |
| (d) | Insurance allowance under paragraph 6The amount of premiums up to maximum of | K400 |
| (e) | Handicapped persons allowance under paragraph 8A | K600 |
| (a) | Married allowance under paragraph 2 | K2,100 |
| (b) | Single allowance under paragraph 4 | K900 |
| (c) | Child allowance under paragraph 5 (subject to apportionmentpursuant to sub-paragraph (2) of paragraph 5) | K330 |
| (d) | Insurance allowance under paragraph 6The amount of premiums up to maximum of | K400 |
| (e) | Handicapped persons allowance under paragraph 8A | K600 |
| (a) | Married allowance under paragraph 2 | K4,600 |
| (b) | Single allowance under paragraph 4 | K1,800 |
| (c) | Child allowance under paragraph 5 (subject to apportionmentpursuant to sub-paragraph (2) of paragraph 5) | K330 |
| (d) | Insurance allowance under paragraph 6The amount of premiums up to maximum of | K800 |
| (e) | Handicapped persons allowance under paragraph 8A | K600 |
| (a) | Primary allowance under paragraph 2 | K6,000 |
| (b) | Insurance allowance under paragraph 6The amount of premiums up to maximum of | K800 |
| (c) | Handicapped persons allowance under paragraph 8A | K600 |
| (a) | Primary allowance under paragraph 2 | K12,000 |
| (b) | Insurance allowance under paragraph 6The amount of premiums up to maximum of | K800 |
| (c) | Handicapped persons allowance under paragraph 8A | K600 |
Part II – Individual tax credit
(Paragraph 9A)
Table1 with effect from 1st April, 1993| Primary allowance under sub-paragraph 9A (1) | K72,000 |
| Tax credit under sub-paragraph 9A(2) and 9A(3) | K13,000 |
| Individual tax credit under sub-paragraph 9(1) | K45,000 |
| Individual tax credit under sub-paragraph 9(1) | K60,000 |
Annexure "B"
Part I
(Sub-paragraph 10(1)(a))
| | Rate per centum |
| Lump sum payments | 10 |
Part II
(Sub-paragraphs 10(1)(b), (c), (d) and (e))
Table1 with effect from 1st April, 1969Balance of income charged either under sub-paragraphs 10(1)(b), (c), (d) and (e) but excluding income charged under sub-paragraph 10(1)(a):The part of the balance of such income that—| does not exceed K500 | 7.5 |
| exceeds K500 but does not exceed K1,000 | 10.0 |
| exceeds K1,000 but does not exceed K1,500 | 12.5 |
| exceeds K1,500 but does not exceed K2,000 | 15.0 |
| exceeds K2,000 but does not exceed K2,500 | 20.0 |
| exceeds K2,500 but does not exceed K4,000 | 30.0 |
| exceeds K4,000 but does not exceed K6,000 | 35.0 |
| exceeds K6,000 but does not exceed K8,500 | 40.0 |
| exceeds K8,500 but does not exceed K10,500 | 50.0 |
| exceeds K10,500 | 60.0 |
| does not exceed K500 | 7.5 |
| exceeds K500 but does not exceed K1,000 | 10.0 |
| exceeds K1,000 but does not exceed K1,500 | 12.5 |
| exceeds K1,500 but does not exceed K2,000 | 15.0 |
| exceeds K2,000 but does not exceed K2,500 | 20.0 |
| exceeds K2,500 but does not exceed K4,000 | 30.0 |
| exceeds K4,000 but does not exceed K6,000 | 35.0 |
| exceeds K6,000 but does not exceed K8,500 | 40.0 |
| exceeds K8,500 but does not exceed K10,500 | 50.0 |
| exceeds K10,000 but does not exceed K20,000 | 60.0 |
| exceeds K20,000 but does not exceed K25,000 | 70.0 |
| exceeds K25,000 but does not exceed K30,000 | 80.0 |
| exceeds K30,000 | 90.0 |
| does not exceed K500 | 7.5 |
| exceeds K500 but does not exceed K1,000 | 10.0 |
| exceeds K1,000 but does not exceed K1,500 | 12.5 |
| exceeds K1,500 but does not exceed K2,000 | 15.0 |
| exceeds K2,000 but does not exceed K2,500 | 20.0 |
| | Rate per centum |
| exceeds K2,500 but does not exceed K4,000 | 30.0 |
| exceeds K4,000 but does not exceed K6,000 | 35.0 |
| exceeds K6,000 but does not exceed K8,500 | 40.0 |
| exceeds K8,500 but does not exceed K10,000 | 50.0 |
| exceeds K10,000but does not exceed K15,000 | 60.0 |
| exceeds K15,000 but does not exceed K20,000 | 70.0 |
| exceeds K20,000 | 75.0 |
| does not exceed K1,000 | 10.0 |
| exceeds K1,000 but does not exceed K2,000 | 20.0 |
| exceeds K2,500 but does not exceed K4,000 | 30.0 |
| exceeds K4,000 but does not exceed K6,000 | 40.0 |
| exceeds K6,000 but does not exceed K8,000 | 50.0 |
| exceeds K8,000 but does not exceed K10,000 | 60.0 |
| exceeds K10,000 but does not exceed K12,000 | 65.0 |
| exceeds K12,000 but does not exceed K16,000 | 70.0 |
| exceeds K16,000 | 75.0 |
| does not exceed K500 | 5.0 |
| exceeds K500 but does not exceed K2,000 | 10.0 |
| exceeds K2,000 but does not exceed K4,000 | 20.0 |
| exceeds K4,000 but does not exceed K6,000 | 30.5 |
| exceeds K6,000 but does not exceed K8,000 | 40.0 |
| exceeds K8,000 but does not exceed K10,000 | 50.0 |
| exceeds K10,000 but does not exceed K12,00 | 60.0 |
| exceeds K12,000 | 70.0 |
| does not exceed K500 | 5.0 |
| exceeds K500 but does not exceed K2,000 | 10.0 |
| exceeds K2,000 but does not exceed K4,000 | 22.5 |
| exceeds K4,000 but does not exceed K6,000 | 32.5 |
| exceeds K6,000 but does not exceed K8,000 | 45.0 |
| exceeds K8,000 but does not exceed K10,000 | 55.0 |
| exceeds K10,000 but does not exceed K12,000 | 65.0 |
| exceeds K12,000 | 75.0 |
| does not exceed K500 | 5.0 |
| exceeds K500 but does not exceed K2,000 | 10.0 |
| exceeds K2,000 but does not exceed K4,000 | 25.0 |
| exceeds K4,000 but does not exceed K6,000 | 35.0 |
| exceeds K6,000 but does not exceed K8,000 | 45.0 |
| exceeds K8,000 but does not exceed K10,000 | 55.0 |
| exceeds K10,000 but does not exceed K12,000 | 65.0 |
| exceeds K12,000 | 75.0 |
| does not exceed K1,000 | 5.0 |
| exceeds K1,000 but does not exceed K2,000 | 10.0 |
| exceeds K2,000 but does not exceed K4,000 | 20.0 |
| exceeds K4,000 but does not exceed K6,000 | 30.0 |
| exceeds K6,000 but does not exceed K8,000 | 45.0 |
| exceeds K8,000 but does not exceed K10,000 | 55.0 |
| exceeds K10,000 but does not exceed K12,000 | 65.0 |
| exceeds K12,000 | 70.0 |
| does not exceed K1,000 | 5.0 |
| exceeds K1,000 but does not exceed K2,500 | 10.0 |
| exceeds K2,500 but does not exceed K4,000 | 15.0 |
| exceeds K4,000 but does not exceed K6,500 | 20.0 |
| exceeds K6,500 but does not exceed K9,000 | 30.0 |
| exceeds K9,000 but does not exceed K12,000 | 45.0 |
| exceeds K12,000 but does not exceed K15,000 | 60.0 |
| exceeds K15,000 but does not exceed K20,000 | 70.0 |
| exceeds K20,000 but does not exceed K25,000 | 75.0 |
| exceeds K25,000 | 80.0 |
| does not exceed K2,000 | 5.0 |
| exceeds K2,000 but does not exceed K5,500 | 15.0 |
| exceeds K5,500 but does not exceed K10,000 | 25.0 |
| exceeds K10,000 but does not exceed K15,500 | 35.0 |
| exceeds K15,500 but does not exceed K22,000 | 45.0 |
| | Rate per centum |
| exceeds K22,000 but does not exceed K30,000 | 55.0 |
| exceeds K30,000 but does not exceed K40,000 | 60.0 |
| exceeds K40,000 | 65.0 |
Part II
(Paragraph 10(3))
Table11 (with inducement allowance) with effect from 1st April, 1986Balance of income charged either under sub-paragraphs 10(1)(b), (c), (d) and (e) but excluding income charged under sub-paragraph 10(1)(a):| does not exceed K2,000 | 10.0 |
| exceeds K2,000 but does not exceed K5,500 | 25.0 |
| exceeds K5,500 but does not exceed K10,000 | 40.0 |
| exceeds K10,000 but does not exceed K15,500 | 55.0 |
| exceeds K15,500 but does not exceed K22,000 | 65.0 |
| exceeds K22,000 but does not exceed K30,000 | 70.0 |
| exceeds K30,000 | 75.0 |
| does not exceed K2,000 | 5.0 |
| exceeds K2,000 but does not exceed K4,500 | 10.0 |
| exceeds K4,500 but does not exceed K8,000 | 15.0 |
| exceeds K8,000 but does not exceed K12,500 | 25.0 |
| exceeds K12,000 but does not exceed K17,000 | 35.0 |
| exceeds K17,000 but does not exceed K23,000 | 40.0 |
| exceeds K23,000 but does not exceed K30,000 | 45.0 |
| exceeds K30,000 but does not exceed K40,000 | 55.0 |
| exceeds K40,000 | 60.0 |
| does not exceed K5,000 | 5.0 |
| exceeds K5,000 but does not exceed K15,000 | 10.0 |
| exceeds K15,000 but does not exceed K30,000 | 20.0 |
| exceeds K30,000 but does not exceed K50,000 | 30.0 |
| exceeds K50,000 but does not exceed K70,000 | 40.0 |
| exceeds K70,000 but does not exceed K100,000 | 45.0 |
| exceeds K100,000 | 50.0 |
| does not exceed K50,000 | 15.0 |
| exceeds K50,000 but does not exceed K100,000 | 25.0 |
| exceeds K100,000 | 35.0 |
| does not exceed K6000,000 | 15.0 |
| exceeds K600,000 but does not exceed K900,000 | 25.0 |
| exceeds K900,000 | 35.0 |
| does not exceed K900,000 | 15.0 |
| exceeds K900,000 but does not exceed K1,200,000 | 25.0 |
| exceeds K1,200,000 | 35.0 |
| does not exceed K1,200,000 | 10.0 |
| exceeds K1,200,000 but does not exceed K1,800,000 | 20.0 |
| exceeds K1,800,000 | 30.0 |
Annexure "C"
Rates for persons other than individuals, trusts, deceaseds' estate and bankrupts' estate
(Paragraph 11)
Table1 with effect from 1st April, 1968| So much of income as— |
| does not exceed K200,000 | 37.5 |
| exceeds K200,000 | 45.5 |
| Manufacturing company | 35.0 |
| Others | 45.0 |
| On income from manufacturing | 40.0 |
| On other income | 45.0 |
| On income of all banks registered under the Banking and Financial Services Act: |
| (i)i on income up to K10,000,000 | 45.0 |
| (ii) on income in excess of K10,000,000 | 52.5 |
| On income from manufacturing and other income | 45.0 |
| On income of all banks registered under the Banking and Financial Services Act: |
| (i)i on income up to K10,000,000 | 45.0 |
| (ii) on income in excess of K10,000,000 | 52.5 |
| On income from manufacturing and other income | 40.0 |
| On income of all banks registered under the Banking and Financial Services Act: |
| (i)i on income up to K10,000,000 | 40.0 |
| (ii) on income in excess of K10,000,000 | 45.0 |
| On income from manufacturing and other income | 35.0 |
| On income of all banks registered under the Banking and Financial Services Act: |
| (i)i on income up to K100,000,000 | 35.0 |
| (ii) on income in excess of K100,000,000 | 45.0 |
| On income from LUSE listed companies | 30.0 |
| On income from manufacturing and other companies | 35.0 |
| On income of all banks registered under the Banking and Financial Services Act: |
| (i)i on income up to K100 million | 35.0 |
| (ii) on income in excess of K100 million | 45.0 |
Annexure "D"
Rates for trusts, deceaseds' estates and bankrupts' estates
(Paragraph 12)
Table1 with effect from 1st April, 1969The income of—| a trust | 35.0 |
| the estate of deceased person | 35.0 |
| the estate of a bankrupt | 35.0 |
| (1) | a trust | 35.0 |
| (2) | a deceased's estate: | |
| | first K5,000,000 | Nil |
| | next K250,000 | 5.0 |
| | balance | 10.0 |
| (3) | a bankrupts' estate | 35.0 |
| (i) | a trust | 35.0 |
| (ii) | a bankrupt's estate | 35.0 |
Annexure "E"
Rates for public entertainment fees
Table1 with effect from 1st April, 1971Table2 with effect from 1st April, 1977Table3 with effect from 1st April, 1993Annexure "F"
Annexure "G"
Rates for withholding tax on interest and royalties
Table1 with effect from 1st April, 1971Table2 with effect from 26th January, 1973Table3 with effect from 1st April, 1977Table4 with effect from 1st April, 1985| Royalties | 30.0 |
| Interest | 15.0 |
| Royalties | 10.0 |
| Interest | 10.0 |
| Royalties | 10.0 |
| Interest | 10.0 |
| Royalties | 25.0 |
| Interest | 25.0 |
| Royalties | 15.0 |
| Interest | 15.0 |
Annexure "H"
Rates for dividends which the Commissioner-General is prohibited from including in an assessment
Table1 with effect from 1st April, 1972Table2 with effect from 26th January, 1973Table3 with effect from 1st April, 1984| Companies and non-resident shareholders | 20.0 |
| Resident shareholders | 35.0 |
| Companies and non-resident shareholders | 20.0 |
| Resident shareholders | 30.0 |
| Resident companies | 15.0 |
| Non-resident shareholders | 20.0 |
| Resident individual shareholders | 30.0 |
| Resident shareholders | 10.0 |
| Non-resident shareholders not covered by Treaty | 10.0 |
| Non-resident shareholders covered by Treaty | Applicable Treaty rate |
| Resident shareholders | 25.0 |
| Non-resident shareholders not covered by Treaty | 25.0 |
| Non-resident shareholders covered by Treaty | 25.0 |
| Resident shareholders | 15.0 |
| Non-resident shareholders not covered by Treaty | 15.0 |
| Non-resident shareholders covered by Treaty | 15.0 |
Annexure "I"
Rates for deduction of tax from rent under section 82A
Table1 with effect from 1st April, 1984Table2 with effect from 1st April, 1985Table3 with effect from 1st April, 1989Table4 with effect from 1st April, 1993Table5 with effect from 1st August, 1995Table6 with effect from 1st April, 1996Annexure "J"
Rates for withholding tax under section 81A and 81B
Table1 with effect from 1st April, 1989Table2 with effect from 1st April, 1992Table3 with effect from 1st April, 1993Table 4 with effect from 1st April, 1994Annexure "K"
Rates for withholding tax under section 82A
Table1 with effect from 1st April, 1995Table2 with effect from 1st August, 1995Table3 with effect from 1st April, 1996Part C
Current Legislation
| ACCOUNTING YEAR | FEE |
| different tax year, 62 | management or consultant, 2(1); 18(1)(h) |
| ACCOUNTS AND RECORDS | FORMS |
| every person carrying on business must keep, 55 | errors in, 70 |
| AGENT | FISHING |
| assessment of, 67 | averaging of income, 62A |
| company's tax paying agent,69 | |
| definition of, 66(1) | FRAUD |
| payment of tax, 84 | no time limit, 65 |
| rights to recover, 68 | penalty, 102 |
| ALIMONY | GRATUITIES |
| deduction, 40 | apportionment of, 21(1) |
| exemption, Second Schedule paragraph 7(h) | |
| income, First Schedule paragraph 1 | HANDICAPPED PERSON |
| | definition, 2 |
| ALLOWANCES | |
| personal allowances, Charging Schedule | HIGH COURT |
| | appeal to, 111 |
| INDIVIDUAL PAYMENT DATES | |
| payment of provisional tax, 77 | INCOME |
| | after cessation of business, 24 |
| ANNUITY | apportionment, 22 |
| income | classification, 17 and First Schedule |
| capital element, Second Schedule paragraph 10 | deemed received, 19 |
| source deemed to be in Zambia, 18(4) | insurance recovery, 23 |
| | not recovery, 23 |
| APPEALS | of partner, 26 |
| extension of period for lodging, 109(2) | provisions and reserves, 23 |
| notice in writing, 109(1) | receipt, 5 |
| period of lodging 109(1) | |
| Court of Appeal, 111(3) | INCORRECT RETURNS |
| High Court, 111(1) | penalty, 100 |
| to tax revenue Board/Tax Appeal court, 110 | |
| | INDUSTRIAL BUILDING |
| APPORTIONMENT OF INCOME | definition, Fifth Schedule paragraph 1 |
| business income, 22 | initial allowance for, Fifth Schedule paragraph 3 |
| compensation for loss of office, 21(5); leave pay, 21(3) | rates of initial, wear and tear allowances, Fifth Schedule |
| pay in lieu of leave, 21(2) | paragraph 18 |
| APPROVED FUND | INITIAL ALLOWANCE |
| deduction for contributions to, 37 | industrial buildings, Fifth Schedule paragraph 3 |
| definition, 2 | |
| general provisions, Fourth Schedule | INSOLVENCY |
| | priority on, 73 |
| ARREARS OF SALARY | |
| when employee taxable, 21(4) | INSURANCE |
| | business, 25 and Third Schedule |
| ASSESSMENT | |
| Agent, of, 67 | INTEREST |
| appeal against, 109 | deduction of tax from, 80; 82a |
| estimated, 64 | exempt, Second Schedule paragraph 9 |
| not always necessary, 72 | mortgage, 43c |
| objection to, 108 | rates of tax for non resident, paragraph 15 of Charging |
| record of, 10 | Schedule |
| | refund or set off of tax deducted, 90 |
| | set-off, not alowable, 89A |
| AVERAGING | source deemed to be within Zambia, 18(e) |
| farming and fishing income, 62A | source outside Zambia, 14 |
| | to be taxed gross, 60 |
| AVOIDANCE | |
| by change in ownership of shares, 94 | JOB CREDITS |
| by non-distribution of dividends, 95 | provision for, 90A |
| by transations generally, 95A | |
| by trust, 97 | JOINT RETURN |
| loss, deductible, 96 | partners, 61 |
| BAD AND DOUBTFUL DEBTS | LAND |
| | |