Tax Rates and Allowances

8/13/2019 Tax Rates and Allowances

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2006/07 TAX TABLES

The tax year for both individuals and companies, referred to as the charge year, runs from1 April to 31 March.

Company Tax

This is levied on business profits of incorporated companies and branches of foreigncompanies. Taxpayers are required to compute taxable income on an actual basis byreference to the charge year.

A Company that has an accounting yearend other than 31 March can apply to the !"A tobase its tax return on the accounting yearend. The final tax returns are due by 3# $eptemberfollo%ing the end of the respective charge year.

Company Standard Tax Rates Rate %

&usinesses %ith turnover of up to !' (## m excluding consultancy business&an)s * +irst !' (# m profit

"emainder-xporters ofnontraditional products e.g. cotton, flo%ers, tobacco/Copper 0 Cobalt mining companies+armers and producers of chemical fertilisersManufacturers and others including those listed on u$-2ncome on commercial activities of exempt organisations

33#1(131

4e% listing on the u$- attracts (5 discount on the rates sho%n above and a further 5discount %here at least 335 of shares are ta)en up by !ambians. The discounts areavailable for 1 year only.

Micro and small enterprises are exempt from income tax for the first 3 and years ofoperations for enterprise operating in urban area and rural area respectively.

Provisiona tax

A provisional tax return sho%ing an estimate of the income for the charge year must be filedby 3# 6une of each year. A revised return should be submitted if the estimate of taxableincome changes substantially

There are penalties for late submission oftax returns of !' 37#,### per month or part thereofthat the return is late.

3.4 Advanced Taxation

Amendment Act 2006

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Capita Ao!an"es Rate %

Capital expenditure incurred in mining operations+arm %or)s and improvements-quipment used in manufacturing, farming and tourism

All leased assets

8lant, machinery and commercial vehicles4on commercial vehicles9evelopment allo%ance on selected gro%ing plants2ndustrial buildingsCommercial buildings

1##1####

((#1#(

Carry #or!ard Losses

:ther than for successor companies to the !ambia Consolidated Copper Mines limited;!CCM;/, carry for%ard of company tax losses is restricted to years. $uccessor companiesto !CCM no% include successor buyers of privatised mines or any ne% mining companiesformed.

Con"ession Rates $or Copper Co&at 'inin( Companies Rate %

Mineral royalty on gross revenue"oyalties, management fees and dividends to shareholders 0 affiliatesCapital expenditure deduction on all mining operations

Period o$ "arry $or!ard o$ tax osses

'CM, $melter Co and MCM:ther successor !CCM companies

#.7

4il1##

(#yrs1#yrs

)ndexation o$ minin( osses

=olders of large scale mining licences are allo%ed to 2ndex the carry for%ard losses andcapital allo%ances.

Con"essions $or Companies *nder t+e Proposed ,am&ia -eveopment A(en"y .,-AA"t

Compute corporation tax at current rates on #5 of the profits earned for a period of years starting from the first year profits are returned.

-xempt dividends from tax for a period of years from the date of first declaration.

Allo% capital expenditure on improvement or for the upgrading of infrastructure to

qualify for improvement allo%ance of 1##5 of such expenditure for tax purposes.


Amendment Act 2006

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Persona Taxation

Pay As 1o* Earn

8A?- is collected at source from employees in gainful employment. The employer deductsthe tax from the employees@ salaries or %ages and remits the tax to the !"A by the 1th ofthe month follo%ing the month of deduction. The employees are entitled to a tax exemptthreshold of !'3, #,### per annum or !' 3(#,### per month. The structure for 8A?- is assho%n in the table belo%.

-ach disabled 2ndividual is entitled to a tax credit of !'37, ### per annum. Acompany employing persons %ith disabilities is entitled to a deduction of !'##, ###per annum for each such person employed.

The annual deductible limit for contributions to Approved 8ension +unds remains atthe lo%er of 15 of income and !'1#, ###. +urther, an employee %ho contributesto an approved pension contribution scheme is allo%ed a refund of both hiscontribution and that of the employer@s share upon loss of employment.

:n cessation of employment, the 2ncome Tax Act ;2TA;/ provides for exemption fromtax of the first !'1# million on terminal benefits paid to retirees and retrenchedpersons. The balance of such payments is subBect to tax at 1#5.

a*e Added Tax .3AT3

Companies and individuals dealing in supplies classified as taxable are required to registerfor AT and submit returns to the !"A for each month %ithin (1 days of the end of the monthto account for excess output over input AT

The turnover threshold for registration is !M'(## million per annumD

oluntary registration for businesses %ith turnover belo% the registration threshold isno longer allo%edD

AT registered suppliers %ith a turnover of over '1 billion are required to submitinput tax schedules electronicallyD

$upplies of goods and services are categorised into three taxable, exempt infantcereals and maiEe and flour made from it/, and Eerorated. 2nput tax on exemptsupplies is not claimable.

The standard rate of AT is 1F.5 for all domestic taxable supplies and #5 forexports and selected medical equipmentD and

The period in %hich input AT on preproduction activities on mineral prospectingcompanies can be recovered has been extended from four to five years.


Amendment Act 2006

Taxa&e )n"ome per ann*m .,45200/06 Taxa&e )n"ome per ann*m .,452006/07

+irst 3,37#,### G #54ext ,7#,### G 3#54ext ,###,### G 35&alance G #5

+irst 3,#,### G #54ext H,,(# G 3#54ext ,F7,### G 35&alance G 3F.5

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)mport AT

2mport AT is levied on imports of taxable goods at the rate of 1F.5.

Reverse AT

"everse AT is charged on services provided by nonresident suppliers includingmanagement consultancy, research, advertising, construction and royalties at the standardrate of 1F.5. "everse AT is applicable %ith effect from 1 April (##3 irrespective of %herethe service is rendered from provided the beneficiary is in !ambiaD ho%ever services thatconstitute local supplies in other AT Burisdiction are excluded.

'inera Royaty Tax

Mineral royalty tax is payable by all holders of mining 2icenses and is calculated onthe gross value of minerals produced. The rate for small and medium scalecompanies involved in the mining of gemstones and other precious stones andmetals is 5. The successor companies to !CCM have a concessionary rate of #.75

The due date for the submission of the monthly mineral royalty return and payment ofmineral royalty is 1th of the month follo%ing the month of sale.

"ene%al of mining licenses is subBect to a tax clearance certificate.

Property Trans$er Tax .3PTT3

8roperty transfer tax is charged at 35 on the realisable value of the property beingtransferred. 2t is payable by the transferor. 8roperty definition 2ncludes.

Any land including any buildings, structures, or other improvements thereon/D andAny share 2ssued by a company in !ambia that is not listed on the usa)a $toc)-xchange ;u$-;/.

The realised value is the price at %hich the shares or land could, at the time oftransfer, reasonably have been sold on the open mar)et.

There is an exemption for transfers of shares or land %ithin the same group ofcompanies as long as the transferee is a company resident in !ambia/ and shares incompanies listed on the u$-.

C*stoms -*ties

Car&on tax on motor ve+i"es

An annual carbon tax on motor vehicles has been introduced on all motor vehicles effective from1 April (##7 as follo%s>


Amendment Act 2006

Cyinder "apa"ity 4!a"+a

1## CC or less1## CC to (###CC(###CC to 3###CC:ver 3### CC

#,###1##,###1#,###(##,###

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it++odin( Tax .38T3

The rate of

9ividends, interest, royalties, rent, commissions, management and consultancy fees.

Construction and haulage by nonresidents.

8ayments to non resident entertainers and sports persons.

Commissions paid to non resident and residents %ho are not employees of the payer.

The rate is reduced under certain 9ouble Taxation Treaties ;9TT;/ %here the payment is toa resident of a treaty country. Advance clearance in %riting is required from the !"A to%ithhold tax at a reduced rate. +or nonresident recipients, the

Tax Rates and Allowances

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