CHAPTER 331 - VALUE ADDED TAX ACT: SUBSIDIARY LEGISLATION

INDEX TO SUBSIDIARY LEGISLATION

Value Added Tax Transitional Regulations

Value Added Tax (First Registration) Order

Value Added Tax (Zero-Rating) Order

Value Added Tax (Appeals Tribunal) Regulations

Value Added Tax (Supply) Regulations, 1996

Value Added Tax (Bad Debt Relief) Regulations, 1996

Value Added Tax (Exemptions) Order, 1996

Value Added Tax (Taxable Value) Regulations, 2007

Value Added Tax (Rate of Tax) Order, 2008

Value Added Tax (General) Regulations, 2010

Value Added Tax (Application for Registration) Order, 2012

VALUE ADDED TAX TRANSITIONAL REGULATIONS

[Section 54]

Arrangement of Regulations

   Regulation

   1.   Title

   2.   Interpretation

   3.   Relief for registered dealers under the repealed Act

   4.   Relief from tax in respect of certain imported goods

   5.   General limitations

[Regulations by the minister]

SI 65 of 1995.

 

1.   Title

These Regulations may be cited as the Value Added Tax Transitional Regulations.

 

2.   Interpretation

In these regulations—

“the repealed Act” means the Sales Tax Act.

 

3.   Relief for registered dealers under the repealed Act

   (1) Subject to this Regulation, a registered supplier referred to in sub-section (1) of section 54 of the Act may claim, as input tax, a credit or deduction in respect of the tax on goods referred to that sub-section.

   (2) No claim under this regulation shall be allowed unless—

      (a)   the registered supplier has paid the supplier of the goods for them;

      (b)   the registered supplier has lodged all sales tax returns and paid to the Commissioner-General all sales tax or other money due in respect of those returns or otherwise arising under the repealed Act;

      (c)   the tax return by which the claim is made is supported by a Schedule of all goods to which the claim relates, and specifying, in relation to each consignment—

      (i)   the quantity, description and value of the goods;

      (ii)   the number and date of the purchase invoice or customs bill of entry;

      (iii)   the name and address of the supplier of the goods;

      (iv)   the sales tax paid.

 

4.   Relief from tax in respect of certain imported goods

   (1) Subject to this regulation, a taxable supplier may claim, as input tax, a credit or deduction in respect of the tax on goods imported on or after 1st May, 1995.

   (2) No claim under this regulation shall be allowed unless—

      (a)   the taxable supplier has paid the supplier of the goods for them;

      (b)   the taxable supplier has lodged any sales tax returns due under the repealed Act and paid to the Commissioner-General all sales tax or other money due in respect of those returns or otherwise arising under the repealed Act;

      (c)   the tax return by which the claim is made is supported by a Schedule of all goods to which the claim relates, and specifying, in relation to each consignment—

      (i)   the quantity, description and value of the goods;

      (ii)   the number and date of the purchase invoice and the customs bill of entry;

      (iii)   the name and address of the supplier of the goods;

      (iv)   the sales tax paid.

 

5.   General limitations

   (1) No claim under these Regulations shall be allowed unless the claim is made by the return relating to the registered supplier’s first prescribed accounting period.

   (2) A claim under these Regulations shall be allowed only to the extent and subject to the conditions prescribed by or under section 18 of the Act in relation to input tax generally.

   (3) Without limiting the generally of sub-regulation (2)—

   (a)   where the supplier is not in possession of documentary evidence as prescribed for the purposes of sub-section (3) of that section, the claim shall be disallowed; and

   (b)   a claim may be partly disallowed by rules of apportionment prescribed under that section and applying to the supplier’s business.

   (4) No claim under these Regulations shall be allowed in respect of goods in respect of which a drawback or other relief under the repealed Act has been claimed and allowed.

   (5) A claim cannot be made under regulations three and regulation four in respect of the same goods.

VALUE ADDED TAX (FIRST REGISTRATION) ORDER

[Section 53]

[Re-denominate the currency as stipulated under S 4 of Re-denomination Act, 8 of 2012, read with Bank of Zambia Act, 43 of 1996.]

Arrangement of Paragraphs

   Paragraph

   1.   Title

   2.   Taxable turnover requiring registration

SI 60 of 1995.

[Order by the Minister]

 

1.   Title

This Order may be cited as the Value Added Tax (First Registration) Order.

 

2.   Taxable turnover requiring registration

   (1) In this Order—

“relevant quarter” means any period of three consecutive months commencing—

      (a)   on 1st May, 1994; or

      (b)   on the first day of any subsequent calendar month;

“relevant year” means any period of twelve months commencing—

      (a)   on 1st May, 1994; or

      (b)   on the first day of subsequent calendar month.

   (2) For the purposes of sub-section (3) section 53 of the Act, the prescribed turnover shall be calculated by reference to the taxable turnover of the business concerned during any relevant year and, if necessary, during each relevant quarter.

   (3) Where, as at 1st May, 1995, the taxable turnover of a business exceeds or is likely to exceed—

      (a)   thirty million kwacha in any relevant year; or

      (b)   seven million five hundred thousand kwacha in any relevant quarter;

the business shall be taken to exceed prescribed turnover for the purposes of sub-section (3) of section 53 of the Act, and, subject to the provisions of that section, the person carrying on the business shall be registered by the Commissioner-General accordingly.

   (4) In calculating, for the purposes of this Order, that part of the turnover of a business that is attributable to taxable supplies, supplies made in the course of the business before the tax commencement day shall be regarded as taxable if they would have been taxable had they been made after that day.

VALUE ADDED TAX (ZERO-RATING) ORDER

[Section 15]

Arrangement of Paragraphs

   Paragraph

   1.   Title

   2.   Interpretation

   3.   Revocation of statutory instruments

      FIRST SCHEDULE

      SECOND SCHEDULE

[Order by the Minister]

SI 133 of 2011,

SI 50 of 2011,

SI 5 of 2010,

SI 83 of 2009,

SI 81 of 2009,

SI 57 of 2009,

SI 26 of 2009,

SI 3 of 2009,

SI 76 of 2008,

SI 33 of 2008,

SI 13 of 2008,

SI 13 of 2005,

SI 12 of 2005,

SI 13 of 2004,

SI 9 of 2003,

SI 100 of 2002,

SI 13 of 2001,

SI 12 of 2000,

SI 21 of 1999,

SI 28 of 1999,

SI 13 of 1998,

SI 71 of 1998,

SI 17 of 1997,

SI 109 of 1996.

 

1.   Title

1This Order may be cited as the Value Added Tax (Zero-Rating) Order.

 

2.   Interpretation

In this Order, unless the context otherwise requires—

“charitable organization” means a non-profit making organization which provides humanitarian aid for education, health, poverty alleviation or other similar programmes.

[Ins by para 2 of SI 71 of 1998.]

“designated official” means a person who is confirmed by the ministry responsible for foreign affairs as being accorded rights and privileges under an international agreement;

“diplomat” means the head of a mission or a member of the diplomatic staff of a mission, of a country accredited to the Republic of Zambia, who is entitled to diplomatic rights and privileges under an international agreement;

“Donor” means an accredited diplomatic mission or aid agency of such a diplomatic mission or any aid agency that may be approved by the Government of the Republic of Zambia;

“donor funding” includes funding provided in form of a loan credit or grant for development assistance to the government of the republic of Zambia.

[Subs by para 2 of SI 12 of 2000.]

“eligible goods or services” means goods or services acquired by a diplomat or a designated official for their personal use or enjoyment, or in the performance of their official duties subject to the following limitations;

      (a)   in the case of a diplomat, to the extent that the foreign country grants reciprocal

privileges to diplomats accredited to that country from Zambia; or

      (b)   in the case of a designated official to the extent allowed by the ministry responsible for foreign affairs;

“inclusive tour” means a published package of tourist services booked before a visitor arrives in Zambia, which includes—

      (a)   accommodation and any provision of meals; and

      (b)   other tourist services, not ancillary to accommodation and meals, which account for a significant proportion of the package when sold, or offered for sale, at an inclusive price and when the service covers a period of more than twenty-four hours or includes overnight accommodation;

“medical supplies and drugs” means any substance or mixture of substances prepared, sold or represented for use of—

   (a)   the diagnosis, treatment, mitigation or prevention of a disease, disorder or abnormal physical state, or the symptoms thereof, in man or animal; or

      (b)   restoring, correcting or modifying organic functions in man or animal; but does not include preparations, whether or not possessing therapeutic or prophylactic properties, commonly used for toilet purposes or in connection with the care of the human body, whether for cleansing, deodorising, beautifying, preserving or restoring;

“poultry” means chickens, ducks, geese and turkeys;

“technical aid programme or project” means the provision of goods or services under a technical

aid agreement or project with the Government of the Republic of Zambia;

“tourist” means a person who is neither a citizen nor a resident of Zambia.

 

3.   Revocation of statutory instruments

The Statutory Instruments listed in Part II of the Appendix to this Order are hereby revoked.

FIRST SCHEDULE

REVOKED STATUTORY INSTRUMENTS

Statutory Instruments 

Number 

1. Value Added Tax (Zero-Rating) Order, 1995 

104 of 1995 

2. Value Added Tax (Zero-Rating) (No. 2) Order, 1995 

202 of 1995 

3. Value Added Tax (Zero-Rating) Order, 1996 

61 of 1996

SECOND SCHEDULE

[Section 15]

[Second Sch subs by reg 2 of SI 50 of 2011.]

1.   Interpretation

In this Schedule, unless the context otherwise requires-

“designated official” means a person who is confirmed by the Ministry responsible for foreign affairs as being accorded rights and privileges under an international agreement;

“diplomat” means the head of a mission or a member of the diplomatic staff of a mission of a country accredited to the Republic of Zambia, who is entitled to diplomatic rights and privileges under an international agreement or the Diplomatic Immunities and Privileges Act;

“donor” means an accredited diplomatic mission or acid agency approved by the Government of the Republic of Zambia;

“donor funding” means funding provided by a donor but does not include funding provided in the form of a loan other than developmental credit to the Government of the Republic of Zambia;

“eligible goods or services” means goods or services acquired by a diplomat or a designated official in the performance of their official duties for their personal use or enjoyment, subject to the following limitations:

      (a)   in the case of a diplomat, to the extent that the foreign country grants reciprocal privileges to the Zambian diplomats accredited to that country from Zambia; and

      (b)   in the case of a designated official, to the extent allowed by the Ministry responsible for foreign affairs;

“inclusive tour” means a published package of tourist services booked before a visitor arrives in Zambia, which includes-

      (a)   accommodation and any provision of meals; and

      (b)   any tourist services not ancillary to accommodation and meals which account for a significant proportion of the package when sold or offered for sale at an inclusive price and when the service covers a period of more than twenty-four hours or includes overnight accommodation;

    “medical supplies and drugs” means any substance or mixture of substance prepared, sold or for use in-

      (a)   the diagnosis, treatment, mitigation or prevention of a disease, disorder or an abnormal physical state, or symptoms thereof, in human beings or animals; or

      (b)   restoring, correcting or modifying organic functions in human beings or animals, but does not include preparations, whether or not possessing therapeutic or prophylactic properties, commonly used for toilet purposes or in connection with the care of the human body, whether for cleaning, deodorizing, beautifying, preserving or restoring;

“technical aid programme or project” means the provision of goods or services under a technical aid agreement or project with the Government of the Republic of Zambia; and

“tourist” means a person who travels to, and stays in, places outside that person’s usual residence for leisure, business and other purposes not related to the exercise of an activity remunerated from within the place visited, but does not include a citizen or a person resident in Zambia.

2.   Zero rated goods and services

The following goods and services are zero-rated:

Group 1- Export of Goods

      (a)   export of goods from Zambia by, or on behalf of, a taxable supplier, where such evidence of exportation is produced as the Commissioner-General may require.

      (b)   the supply of ancillary services, which are provided at the port of exportation of the goods under paragraph (a), including transport and packaging;

      (c)   the supply of freight transport services from or to Zambia, including trans-shipment and ancillary services that are directly linked to the transit of goods through Zambia to destinations outside Zambia;

      (d)   the supply of goods by a duty free shop approved under regulation 51 of the Customs and Excise (General) Regulations, 2000, for export by passengers on flights to destinations outside Zambia;

      (e)   the supply of goods, including meals, beverages and duty free goods for use in aircraft stores on flights to destinations outside Zambia.

      (f)   the supply of aviation fuel;

      (g)   the supply of services which are physically rendered outside Zambia;

      (h)   the supply by a tour operation or travel agent licensed as such under the Tourism and Hospitality Act, 2007, to a tourist of an inclusive tour, subject to such conditions as the Commissioner-General may require;

      (i)   the supply by a licenced tour operator to tourists of the following services:

      (i)    game viewing;

      (ii)    abseiling;

      (iii)    bungee jumping;

      (iv)    canoeing;

      (v)    hot air ballooning;

      (vi)    hang gliding;

      (vii)    para-sailing;

      (viii)    river boarding;

      (ix)    white water rafting

      (x)    boat cruising;

      (xi)    micro lighting;

      (xii)    helicopter tours;

      (xiii)    walking safaris;

      (xiv)    clay pigeon shooting;

      (xv)    elephant back safari;

      (xvi)    fixed wing flights over the falls;

      (xvii)    gorge swinging or flying fox;

      (xviii)    paint ball shooting;

      (xix)    quad biking safari;

      (xx)    steam train excursion; and

      (xxi)    walking with lions:

Provided that accommodation, food and beverages shall be excluded unless these have been pre booked as a package tour and are inclusive in the total price of the package tour, or have been approved by the Commissioner-General;

      (j)   exportation of goods by a tourist, subject to such evidence and conditions and the Commissioner-General may require; and

      (k)   international interconnection services.

Group 2 – Supplies to Privileged Persons

      (a)   goods imported by the President;

      (b)   goods imported by diplomats or a diplomatic mission accredited to the Republic of Zambia for the official purposes of that mission, to the extent that the foreign country grants reciprocal privileges to    diplomats and to the diplomatic mission of Zambia in that country;

      (c)   the supply of goods or services to a donor in Zambia for the official purpose of that donor where evidence of purchase is produced by that donor or the Commissioner-General on behalf of the donor as the Commissioner-General may require.

      (d)   Goods or services supplied or imported under a technical aid programme or project, which are-

      (i)    paid through donor funding; and

      (ii)    provided by the donor, or a contractor of the donor, under a written agreement with the Government of the Republic of Zambia where evidence of purchase under that agreement is produced by the donor or the Commissioner-General as the Commissioner may require;

      (e)   Supplies or imports under a technical aid agreement providing for exemption from taxation under the laws of Zambia-

      (i)    dated on or before 30th June, 1996; or

      (ii)    approved by the Minister responsible for finance; and

      (f)   Goods or services supplied to or imported by-

      (i)    a developer for the purpose of developing infrastructure in a multi-facility economic zone or industrial park; or

      (ii)    a business enterprise for the purpose of carrying on business in a multi-facility economic zone or industrial park;

licenced as such by the Zambia Development Agency and approved by the Minister on the recommendation of the Director-General of the Zambia Development Agency, where evidence of purchase is produced by the developer or the Commissioner-General as the Commissioner-General may require.

Group 3 – Building Supplies

The supply of cement, roofing sheets, bricks and blocks to public benefit organizations approved by the Minister under the Income Tax Act, where evidence is provided that such building supplies will be used for construction of buildings for non-profit, humanitarian or poverty alleviation activities.

Group 4 – Mosquito Nets

The following raw material used for manufacturing mosquito nets:

      (a)   polyster textured yarn: HS Code 5402.33.00;

      (b)   textile dyestuff: HS Code 3204.11.00; and

      (c)   long-lasting insecticide treated curtains.

Group 5 – Medical Supplies

      (a)   medical supplies and drugs; and

      (b)   the supply to, or importation by, a medical doctor, option, dentist, hospital or clinic registered under the Health Professions Act, 2009, or to a patient, of equipment designed solely for medical or prosthetic use.

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