Zambia's Ministry of Finance has published the 2022 Budget Speech that was delivered to the National Assembly on 29 October 2021. The main revenue measures of the budget include:

• An increase in the exempt threshold for PAYE from ZMW 4,000 per month to ZMW 4,500, with the income tax brackets adjusted accordingly:
  • up to ZMW 4,500 - 0%
  • ZMW 4,501 up to 4,800 - 25%
  • ZMW 4,801 up to ZMW 6,900 - 30%
  • over ZMW 6,900 - 37.5%
• The reintroduction of the deductibility of mineral royalty for corporate income tax assessment purposes to attract investment and boost production in the mining sector;
• An extension of the carry-forward limit for disallowed interest deductions from 5 years to 10 years, in alignment with the carry-forward limit for losses;
• The extension of the Property Transfer Tax on transfers of mineral processing and other mine related licenses at the applicable rate of 10%;
• The suspension of Corporate Income Tax for persons carrying on the business of manufacturing ceramic products for the charge years 2022 and 2023;
• A reduction in the standard Corporate Income Tax rate from 35% to 30%, although the top marginal tax rate for telecommunication companies will be maintained at 40%;
• An extension of the 15% Corporate Income Tax rate on income earned by hotels and lodges on accommodation and food services from 31 December 2021 to 31 December 2022;
• The reform of the Rental Income Tax regime by charging Turnover Tax at a rate of 4% for income below ZMW 800,000 per annum, with the individual or corporate income tax applied for rental income above ZMW 800,000;
• The introduction of a 20% withholding tax on reinsurance placed with reinsurers not licensed in Zambia;
• The upward revision of the bands for presumptive taxes for transport vehicles based on seating capacity, with the top annual tax increased from ZMW 10,800 to ZMW 12,960 for vehicles with a seating capacity of 64 and above;
• Changes to revamp and remodel economic zones under the Multi Facility Economic Zone framework and make the incentives more targeted:
  • the introduction of 0% tax for a period of 10 years from the first year of commencement of works in a Multi Facility Economic Zone or Industrial Park, on dividends declared on profits made on exports by companies operating in these economic zones under the Zambia Development Agency Act No. 11 of 2006;
  • the introduction of 0% tax for a period of 10 years from the first year of commencement of works in a Multi Facility Economic Zone or Industrial Park, on profits made on exports by companies operating in these economic zones under the Zambia Development Agency Act No. 11 of 2006, after which 50% of profits will be taxed in the 11th to 13th year and 75% of profits will be taxed in the 14th and 15th year; and
  • a reduction in the threshold to USD 50,000 for a Zambian citizen to qualify for incentives provided under the Zambia Development Agency Act No. 11 of 2006;
• Various VAT changes, including:
  • zero-rating for agricultural equipment and accessories, including:
    • manure spreaders;
    • balers;
    • combine harvesters;
    • commercial sprinkler irrigation systems;
    • animal feed grinder-mixer;
    • pelleting machines;
    • sprayer;
    • trailers of a specific HS code; and
    • dryers for agricultural products of a specific HS code;
  • zero-rating for solar charge control units and solar streetlights; and
  • a change in the applicable VAT rate to the standard rate for the following:
    • property and non-life insurance, along with the repeal of the current insurance premium levy; and
    • booklets and newspapers.

In addition to the above, the budget also includes various customs and excise changes.

Subject to approval, the budget measures will generally apply from 1 January 2022.