Tax hikes made outside the Budget
Amb. Emmanuel Mwamba wrote;
PricewaterhouseCoopers (PwC) in its full 2025 Illustrative 2025 Budget Analysis, the Zambia Revenue Authority (ZRA), the Zambia Institute for Policy Analysis and Research (ZIPAR) and the Ministry of Finance all did not highlight or mention these drastic tax changes that have recently been introduced.
These recent tax changes are probably as a result of the second supplementary budget or emergency adjustments made to the National Borrowing Plan.
The Speaker of the National Assembly, Nelly Mutti, recently summoned a special sitting of Parliament to deliberate on the Report of the Planning and Budgeting Committee regarding the Revised Annual Borrowing Plan for 2024.
Here are the new hiked taxes:
1. Property transfer tax rate on sale of land, buildings and shares increased to 8% from 5%
2. Rental income tax rate increased to 16% from 12.5% for anyone earning rental income of above K800,000 per annum.
3. Turnover tax rate increased to 5% from 4%.
4. More businesses to be relegated to Turnover Tax from Income Tax as the turnover threshold has been increased to K5million from K800,000 per annum.
5. If the Minister of Finance does not issue an SI to align the VAT registration turnover threshold to K5million per annum, then it would be possible for a single business to be on both VAT and Turnover Tax at the same time.
6. Mobile Money Levy to be applicable on Bank to Wallet Transfers, if the Minister of Finance does not issue an SI to provide for Exemptions. Meaning, Banks would need to begin accounting for this tax on bank to wallet transfers and remit to ZRA.
This budget came at a critical time as Zambia faced severe climate change impacts, Load-shedding, inflation, economic challenges, and ambitious growth targets amidst resource constraints.
The 2025 national budget focused on “Building Resilience for Inclusive Growth and Improved Livelihoods,” aiming for a 6.6% GDP growth rate by prioritizing investments in mining, agriculture, and infrastructure, with a key focus on addressing the energy deficit through increased renewable energy sources, while also aimed to reduce inflation to 6-8% and maintain a budget deficit of 3.1% of GDP.
All these targets have fallen flat on the face of Musokotwane as the economy has tanked.