PRACTICE NOTE NO. 1/2021 - zra.org.zm

1 PRACTICE NOTE NO. 1/2021 Increases the PAYE exempt threshold to K4, per month; Increases tax rate on betting to 25% from 10%; Introduces Local Content Allowance; Provides for the use of an electronic payment machine as a payment option and introduces a penalty for failure to comply; Imposes stiffer penalties for making false returns and statements; Increases penalty for tax evasion to K90,000 from K9,000; Extends zero-rating to all agricultural tractors and their accessories.

2 IOur ValuesTag LineVisionMissionOur commitment to serving Government, taxpayers, employees and other stakeholders is reflected in our Corporate Values:Taxpayer FocusIntegrityProfessionalismInnovationN etworkingMy Tax, Your Tax, Our DestinyTo optimise and sustain revenue collection and administration for a prosperous world class model of excellence in revenue administration and trade FOREWORD 1 PART I: SUMMARY OF THE INCOME TAX (AMENDMENT) ACT NO.

3 20 OF 2020 THE INCOME TAX (TAX AGENTS) (TERMS AND CONDITIONS) (AMENDMENT) REGULATIONS STATUTORY INSTRUMENT NO. 116 OF 2020 THE INCOME TAX (TRANSFER PRICING) (AMENDMENT) REGULATIONS, STATUTORY INSTRUMENT No. 117 OF 2020 THE INCOME TAX (LOCAL CONTENT ALLOWANCE) REGULATIONS, STATUTORY INSTRUMENT NO. 120 OF 2020 THE PROPERTY TRANSFER TAX (AMENDMENT) ACT NO.

4 22 OF 2020 THE MINES AND MINERALS DEVELOPMENT (AMENDEMENT) ACT NO. 25 OF 2020 THE SKILLS DEVELOPMENT LEVY (AMENDMENT) ACT NO. 24 OF 2020 THE TOURISM AND HOSPITALITY (TOURISM LEVY) (AMENDMENT)REGULATIONS STATUTORY INSTRUMENT NO. 121 OF 2020 THE VALUE ADDED TAX (AMENDMENT) ACT NO. 23 OF 2020 THE VALUE ADDED TAX (ZERO-RATING) (AMENDMENT) ORDER STATUTORY INSTRUMENT NO. 81 OF 2020 THE VALUE ADDED TAX (ZERO-RATING) (AMENDMENT) ORDER STATUTORY INSTRUMENT NO.

5 89 OF 2020 THE VALUE ADDED TAX (ZERO-RATING) (AMENDMENT) ORDER STATUTORY INSTRUMENT NO. 107 OF 2020 THE VALUE ADDED TAX (ZERO-RATING) (AMENDMENT) ORDER STATUTORY INSTRUMENT NO. 125 OF 2020 THE CUSTOMS AND EXCISE (AMENDMENT) ACT NO. 21 OF 2020 6 PART II: COMMENTARY ON AMENDMENTS THE INCOME TAX (AMENDMENT) ACT NO. 20 OF 2020 THE INCOME TAX (TAX AGENTS) (TERMS AND CONDITIONS) (AMENDMENT) REGULATIONS STATUTORY INSTRUMENT NO. 116 OF 2020 INCOME TAX (TRANSFER PRICING) (AMENDMENT) REGULATIONS, STATUTORY INSTRUMENT No.

6 117 OF 2020 THE INCOME TAX (LOCAL CONTENT ALLOWANCE) REGULATIONS, STATUTORY INSTRUMENT NO. 120 OF 2020 25 THE PROPERTY TRANSFER TAX (AMENDMENT) ACT NO. 22 OF 2020 THE MINES AND MINERALS DEVELOPMENT (AMENDEMENT) ACT NO. 25 OF 2020 THE SKILLS DEVELOPMENT LEVY (AMENDMENT) ACT NO. 24 OF 2020 THE TOURISM AND HOSPITALITY (TOURISM LEVY) (AMENDMENT) REGULATIONS STATUTORY INSTRUMENT NO. 121 OF 2020 THE VALUE ADDED TAX (AMENDMENT) ACT NO. 23 OF 2020 THE VALUE ADDED TAX (ZERO-RATING) (AMENDMENT) ORDER STATUTORY INSTRUMENT NO.

7 81 OF 2020 THE VALUE ADDED TAX (ZERO-RATING) (AMENDMENT) ORDER STATUTORY INSTRUMENT NO. 89 OF 2020 THE VALUE ADDED TAX (ZERO-RATING) (AMENDMENT) ORDER STATUTORY INSTRUMENT NO. 107 OF 2020 THE VALUE ADDED TAX (ZERO-RATING) (AMENDMENT) ORDER STATUTORY INSTRUMENT NO. 125 OF 2020 THE CUSTOMS AND EXCISE (AMENDMENT) ACT NO. 21 OF 2020 41 PART III: OTHER TAX TREATMENT OF EMPLOYMENT BENEFITS PAYMENTS THAT ARE NOT SUBJECT TO PAY AS YOU EARN (PAYE)

8 TAX TREATMENT OF CERTAIN EXPENSES TAX TREATMENT OF EXPENSES INCURRED ON ENTERTAINMENT, HOSPITALITY AND GIFTS TAX TREATMENT OF CANTEEN EXPENSES, REFRESHMENTS AND FOOD RATIONS PAYMENTS ON CESSATION OF EMPLOYMENT TAX TREATMENT OF PAYMENTS MADE ON MEDICAL DISCHARGE TAX TREATMENT OF ADVANCE AGAINST GRATUITY.

9 PENSIONS AND EMPLOYEE PENSION WITHDRAWALS BY AN INDIVIDUAL CONTINUING IN EMPLOYMENT TAX TREATMENT OF SETTLING IN ALLOWANCES TAXATION OF RENTAL INCOME VALUE ADDED TAX TREATMENT OF VARIOUS SERVICES 51 HIRE OF EQUIPMENT FOR LOADING AND OFFLOADING OF PASSENGERS FROM AIRCRAFT LOADING OF CARGO FOR EXPORT FROM ZAMBIA OFFLOADING OF CARGO FROM OUTSIDE ZAMBIA ANCLLIARY SERVICES RELATING TO GOODS TRANSITING THROUGH ZAMBIA COLD CHAIN SERVICES CLEARING AND FORWARDING SERVICES

10 PARTIAL APPORTIONMENT FOR LEASING VAT TREATMENT OF IMPORTED SERVICES (REVERSE VAT) WITHHOLDING TAX ADMINISTRATION ON WINNINGS PENALTY FOR UNDER-DECLARATION OF TOURISM LEVY TAX RATES MISCELLANEOUS MATTERS APPENDIX