SP Youths in Lusaka Call for Reversal of Burdensome Tax Hikes in Challenging Economic Times

SP Youths in Lusaka Call for Reversal of Burdensome Tax Hikes in Challenging Economic Times

By Paul Mulenga – SP Lusaka District IPS

We, as socialist party youths in Lusaka, are concerned on how the government has increased the taxes in this hard and challenging economy

Income Tax
1. Corporate Income Tax Rate: Increased from 15% to 20% for export of non-traditional products and value addition to copper cathodes.
    – Previous rate: 15%
    – New rate: 20%
    – Percentage increase: 33.33%

2. Pay As You Earn (PAYE) Tax Bands: Revised in 2024, with an increase in the exempt threshold from K4,800 to K5,100 and a reduction of the top rate from 37.5% to 37%.
    – Previous exempt threshold: K4,800
    – New exempt threshold: K5,100
    – Percentage increase: 6.25%

3. Advance Income Tax: Introduced at a rate of 15% on remittances made outside Zambia and exports above USD2000.
    – Previous rate: 0% (not applicable)
    – New rate: 15%
    – Percentage increase: N/A

Value Added Tax (VAT)

1. VAT Threshold: Increased from K800,000 to K1,000,000.
    – Previous threshold: K800,000
    – New threshold: K1,000,000
    – Percentage increase: 25%

Customs and Excise

1. Customs Duty Rate: Increased from 5% to 10% for certain goods.
    – Previous rate: 5%
    – New rate: 10%
    – Percentage increase: 100%

2. Excise Duty Rate: Increased from 20% to 25% for certain goods.
    – Previous rate: 20%
    – New rate: 25%
    – Percentage increase: 25%

Property Tax

1. Property Transfer Tax: Increased from 5% to 7%.
    – Previous rate: 5%
    – New rate: 7%
    – Percentage increase: 40%
2. Property Rental Tax: Introduced at a rate of 10%.
    – Previous rate: 0% (not applicable)
    – New rate: 10%
    – Percentage increase: N/A

Other Taxes

1. Presumptive Tax: Increased by 20% for motor vehicles used for the carriage of persons.
    – Previous rate: Varies
    – New rate: Varies (increased by 20%)
    – Percentage increase: 20%                                  

Statutory Requirements

1. Statutory Reserve Ratio: Increased from 17.0% to 26.0%.
    – Previous ratio: 17.0%
    – New ratio: 26.0%
    – Percentage increase: 52.94%

2. Liquidity Reserve Ratio: Increased from 11.0% to 13.5%.
    – Previous ratio: 11.0%
    – New ratio: 13.5%
    – Percentage increase: 22.73%                                        

We call upon the government to reverse these taxes because they are ki||ing the businesses of the poor Zambians.