In 2006, Zambia adopt finance budget policy to adjust tax for stimulating the development of some industries such as mining, agriculture, manufacture, finance etc, the details is as follows:
(1) The company tax decrease from 45% to 40%;
(2)Remove 15% advance tax of stock bonus in Lusaka Securities Business;
(3)Amend the regulation about valid added tax in <
(a)The cost for environment during enterprise s operating economy can be used to sustain tax;
(b) Expand the stimulating tax measures for enterprises dealing with metal field: decrease the tax rate to 25%, impose zero tax rates on melon-cutting, interest, mine franchise and management fee, and impose 0.6% tax on the distribution of mine franchised management, the carrying forward period 10years. This stimulation measures is up to big-scale mine enterprise, limited to mining company operate on copper, cobalt.
(c) Establish the regulation about loss apportion of big-scale mine enterprise and the exponent of capita limitation. This regulation allows company to keep the real tax under capital & asset and loss carrying forward. (Note: The exponent is the auto coupling system formed between enterprise loss, capital limitation and exchange rate)
(4) Remove 17.5 value added tax for agriculture material such as pesticide, seed, fertilizer.
(5)Increase the import tax of polyester and cotton textile from 15% to 25%. In the meanwhile, exempt import tariff of machinery, accessory and material such as sewing thread in textile & fashion industry, five years duration.
(6)All enterprises specializing in the assemblage of auto-mobile and bicycle needn t hand in bonus tax within five years since the first declare day.
(7) The highest tax paid by bank decrease to 40% from 45%;
(8) The tariff of lp-gas and franchised tax decrease from 30% to 15%.
(9)To encourage overseas exhibitors to invest on Zambia exhibition and fair, government will also derate part tax in the reciprocal principle.
(10) The payer should pay 45% income tax at least 0.2million kwacha to the factory and service dealer without tax clearance certification.
