VALUE ADDED TAX ACT
Arrangement of Sections
Section
PART I
PRELIMINARY
1. Short title
2. Interpretation
3. Application of this Act to partnerships
3A. Application of Act to sole proprietorships
4. Application of this Act to unincorporated organisations
5. [Repealed]
6. Application of this Act to Government agencies
PART II
VALUE ADDED TAX
7. Taxable supplies
7A. Record of sales
8. Imposition and scope of tax
8A. Repealed
8B. Value added tax withholding agent
9. Rate of tax
10. Taxable value of supplies and importations
11. Place of supply of goods
12. Place of supply of services
13. Time of supply of goods or services
14. Time of importation
15. Exemption and zero-ratings
15A Reduction of value added tax in tax free zone
PART III
ACCOUNTING FOR AND PAYMENT OF TAX
16. Tax returns
17. Late lodgment of returns
18. Tax deductions and credits
19. Payment of tax or credit
20. Interest on overdue tax
21. Assessment of tax
PART IV
DEFAULT IN PAYMENT OF TAX
22. Recovery of tax and interest
23. Attachment of debts, etc.
24. Security and production of evidence
24A. Charge on land
25. Requirement for early payment
26. Distress
PART V
REGISTRATION OF SUPPLIERS
27. Register of suppliers
28. Registration
29. Offences and penalties.
29A Late registration
PART VI
REVIEWS AND APPEALS
30. Right of review
31. Conduct of review
32. Appeals
PART VII
ADMINISTRATION AND ENFORCEMENT
33. Functions of Authority
34. Delegation by Commissioner-General
35. Authorised officers
36. Taking of samples
37. Furnishing of information and production of documents
37A. Prohibition of publication or disclosure of information to unauthorised persons
38. Entry and search
38A. Impounding and removal of goods
39. Obstruction of authorised officers
40. Impersonation of authorised officers
41. Immunity of authorised officers
PART VIII
MISCELLANEOUS
42. Records and accounts
42A. Repealed
42B. Electronic monitoring of tax compliance
42C. Use of electronic payment machine
43. False returns and statements
44. Evasion of taxation
45. Fine in lieu of prosecution
46. Advertised retail prices to include tax
46A. Offences by principal officers, partners or shareholders of bodies corporate or bodies unincorporate
47. Adjustment of contracts on changes in tax
48. Priority of tax debts in bankruptcy
49. Evidence by certificate
50. Schemes for obtaining undue tax benefits
50A. Tax information exchange agreements and mutual assistance in tax matters
51. Regulations
52. Administrative rules
53. Transitional registration provisions
54. Other transitional provisions
55. Repeal of Cap. 663 of the 1971 edition and Act 25 of 1990
AN ACT
to impose a tax on the supply of goods and services in Zambia and the importation of goods into Zambia; to repeal the Sales Tax Act and the Insurance Levies Act; and to provide for matters connected with or incidental to the foregoing.
[1st May, 1995]
Act 4 of 1995,
Act 2 of 1997,
Act 6 of 1998,
Act 1 of 1999,
Act 6 of 2000,
Act 3 of 2001,
Act 10 of 2001,
Act 2 of 2002,
Act 2 of 2003,
Act 2 of 2004,
Act 2 of 2005,
Act 8 of 2006,
Act 3 of 2007,
Act 3 of 2008,
Act 3 of 2009,
Act 48 of 2010,
Act 30 of 2011,
Act 14 of 2012,
Act 15 of 2013,
Act 13 of 2014,
Act 17 of 2015,
Act 44 of 2016,
Act 12 of 2017,
Act 15 of 2018,
Act 14 of 2019,
Act 23 of 2020,
Act 44 of 2021,
Act 26 of 2022,
Act 27 of 2023.
SI 88 of 1995,
SI 91 of 1995,
SI 103 of 1995,
SI 108 of 1995,
SI 122 of 1995,
SI 146 of 1995,
SI 150 of 1995,
SI 22 of 1996,
SI 27 of 1996,
SI 61 of 1996,
SI 79 of 1996,
SI 110 of 1996,
SI 11 of 1997,
SI 16 of 1997,
SI 33 of 2008,
SI 89 of 2010,
SI 49 of 2011,
SI 50 of 2011,
SI 132 of 2011,
SI 133 of 2011,
SI 92 of 2012,
SI 93 of 2012,
SI 81 of 2013,
SI 96 of 2013,
SI 97 of 2013,
SI 68 of 2014,
SI 69 of 2014.
[General Note— Value Added Tax Act is amended by the deletion of the words “electronic fiscal device” wherever the words appear and the substitution therefor of the words “electronic invoicing system” by s 6 of the Act 27 of 2023 w.e.f. 1 January 2024.]
PART I
PRELIMINARY
This Act may be cited as the Value Added Tax Act.
(1) In this Act, unless the context otherwise requires—
"accounting year" means a period of 12 months ending on 31st December or such other period as the Commissioner-General may prescribe;
[Subs by s 2 of Act 30 of 2011.]
"authorised officer" means a person appointed under section 35 to be an authorised officer for the purposes of this Act;
"Authority" means the Zambia Revenue Authority established by the Zambia Revenue Authority Act;
"commercial property" means a building that is used for commercial purposes, or land designated or sold for commercial purposes, and includes an office building, an industrial building, a health facility, hotel, shopping mall, retail store, shopping centre, warehouse, garage, recreation centre, dwelling house used for commercial purposes and multi-facility building;
[Subs by s 2 of Act 26 of 2022.]
"Commissioner-General" means the Commissioner-General appointed under Zambia Revenue Authority Act;
"cross-border electronic services" means electronic services supplied in the Republic by a supplier who is resident or carries on business outside the Republic;
[Ins by s 2(c) of Act 27 of 2023 w.e.f. 1 January 2024.]
"disbursement" means expenditure incurred by a supplier in the course of providing goods or services to a customer;
[Ins by s 2 of Act 3 of 2007.]
...
["electronic commerce" rep by s 2(a) of Act 27 of 2023 w.e.f. 1 January 2024.]
...
["electronic commerce" rep by s 2(a) of Act 27 of 2023 w.e.f. 1 January 2024.]
...
["electronic fiscal printer" rep by s 2(a) of Act 27 of 2023 w.e.f. 1 January 2024.]
"electronic invoicing system" means the core system and any other system which has a fiscal memory capable of generating and storing fiscal information and transmitting production, invoicing and stock data in real time to the Authority, and has the capacity to generate and record data and other reports and includes software applications and web based applications;
[Ins by s 2(c) of Act 27 of 2023 w.e.f. 1 January 2024.]
"electronic payment machine" means a payment terminal used by a taxable supplier to receive a payment;
[Ins by s 2 of Act 14 of 2019 w.e.f. 1 January 2020.]
"electronic service" means a service provided or delivered on or through the internet, electronic or digital network;
[Subs by s 2(b) of Act 27 of 2023 w.e.f. 1 January 2024.]
...
[Subs by s 2(b) of Act 27 of 2023 w.e.f. 1 January 2024.]
"electronic fiscal device" means an electronic device, approved by the Commissioner-General, which has a fiscal memory capable of generating and storing fiscal information and has the capacity to generate or record tax invoices and other reports and is capable of transmitting invoice data in real time to the tax invoice management system of the Authority, and includes a fiscalised electronic register, an electronic fiscal printer and an electronic signature device;
["electronic signature device" rep by s 2(a) of Act 27 of 2023 w.e.f. 1 January 2024.]
"exempt importation" means an importation of goods described in the First Schedule;
"exempt supply" means a supply of goods or services described in the First Schedule;
"finance lease" means a lease of implements, machinery or plant where—
(a) the term of the lease, including any period under an option to renew, is equal to or exceeds 75 per centum of the effective life of the leased implements, plant or machinery;
(b) the lessee has an option to purchase the implements, plant or machinery at the expiration of the lease for a fixed or determinable price;
(c) the estimated residual value of the implements, plant or machinery at the expiration of the lease term is less than 25 per centum of its fair market value at the commencement of the lease; or
(d) the lessor does not retain the risks and rewards of ownership; and
[Ins by s 2 of Act 3 of 2008.]
...
["fiscal cash register" rep by s 2(a) of Act 15 of 2018.]
...
["fiscal memory" rep by s 2(a) of Act 27 of 2023 w.e.f. 1 January 2024.]
...
["fiscalised electronic register" rep by s 2(a) of Act 27 of 2023 w.e.f. 1 January 2024.]
"fiscal memory" means a programmable read-only memory permanently built into a fiscalised electronic register or device to store tax information at the time of sale and is only accessed by the Authority or an authorised person;
[Ins by s 2(b) of Act 15 of 2018.]
"fiscalised electronic register" means an electronic device, approved by the Commissioner-General, which has a fiscal memory to record and calculate transactions for purposes of tax at a point of sale and secures the transactions against unauthorised manipulation and deletion and is capable of transmitting the transactions in real time or, where transactions cannot be transmitted in real time, in batches to the invoice management system of the Authority;
[Ins by s 2(b) of Act 15 of 2018.]
"goods" means any article or substance of value, any immovable property and any interest in land, but does not include money, securities or any chose in action;
"Government agency" means—
(a) any Ministry or Department of the Government;
(b) any statutory corporation or board; or
(c) any local authority.
(d) any institution or body in which the Government has direct or indirect control or which is wholly or partially owned by the Government;
[(d) subs by s 2(a) of Act 2 of 1997.]
"health facility" has the meaning assigned to it in the Health Professions Act;
[Ins by s 2(b) of Act 48 of 2010.]
"importation of goods" includes any dealing with goods that renders the goods liable to any duty or other impost under the Customs and Excise Act;
"imported service" means a service rendered by a supplier who is resident outside the Republic and—
(a) performed or undertaken in the Republic; or
(b) the benefit of the service is for a recipient in the Republic
[Ins by s 2(c) of Act 27 of 2023 w.e.f. 1 January 2024.]
"industrial park" has the meaning assigned to it in the Zambia Development Agency Act;
[Ins by s 2 of Act 3 of 2009.]
"input tax" has the meaning ascribed to it in section 18;
"multi-facility economic zone" has the meaning assigned to it in the Zambia Development Agency Act;
[Ins by s 2 of Act 3 of 2009.]
"operating lease" means any lease of implements, plant or machinery, other than a finance lease;
[Ins by s 2 of Act 3 of 2008.]
"prescribed accounting period", in relation to a taxable supplier, means the accounting period determined under section 16 that is applicable to that supplier;
"prescribed interest rate" means the rate that exceeds, by two per centum per annum, the prevailing official discount rate, as published by the Bank of Zambia, that is in force on the 22nd day of each month;
[Subs by s 2(b) of Act 2 of 1997.]
"registered" means registered under Part V;
"supplier" means—
(a) a person, corporation, partnership, joint venture or organisation that supplies goods or services;
[Subs by s 2 of Act 6 of 1998; am by s 2(a) of Act 1 of 1999.]
(b) any Government agency;
"supply of a service" includes—
(a) the provision of goods on lease, hire or loan;
(b) a treatment of any goods;
(c) any other activity which the Minister, by regulation, declares to be the supply of a service for the purposes of this Act;
but does not include—
(i) the provision of any service without consideration, except in so far as the Minister, by regulation, otherwise determines; or
(ii) any other activity which the Minister by regulation declares not to be a supply of a service for the purposes of this Act;
"supply of goods" means—
(a) a sale of goods;
(b) a gift of goods;
(c) where goods are obtained by a taxable supplier for the purposes of a business carried on by him or are, in the course of such a business, manufactured or produced for supply, an appropriation or transfer of possession of the goods—
(i) for his own use or consumption, or for use or consumption by him and others; or
(ii) for use or consumption by his employees or partners, or otherwise in connection with a business carried on by him; or
(d) any other dealing with the goods (other than the supply, in relation thereto, of a service) which the Minister, by regulation, declares to be a supply of the goods for the purposes of this Act;
but does not include an importation of the goods, or any dealing with the goods which the Minister, by regulation, declares not to be a supply of the goods for the purposes of this Act;
"tax" means value added tax imposed by section 8 or additional tax payable under section 17, and "taxation" shall be construed accordingly;
"tax commencement day" means such day, being the first day of a month, as the Minister may, by statutory order, appoint;
"tax invoice" means an invoice, showing such particulars as the Commissioner-General may, by administrative rule, prescribe, relating to a taxable supply of goods or services;
"tax return" means a return referred to in section 16;
"taxable importation" means an importation of goods that takes place in Zambia after the tax commencement day, other than an exempt importation;
"taxable supplier" means a person who is registered or is required by this act to be registered and includes a tax agent or recipient of imported services referred to in section 8;
[Subs by s 2 of Act 2 of 2003.]
"taxable supply" has the meaning ascribed to it in section 7;
"taxable value", in relation to goods or services supplied, or goods imported, means their taxable value ascertained in accordance with section 10,unless the Ministry by regulation, in relation to specified supplies or imports, declares a different value;
[Am by s 2(c) of Act 2 of 1997.]
"Tribunal" means the Revenue Appeals Tribunal established under the Revenue Appeals Tribunal Act; and
[Subs by s 2(a)(ii) of Act 48 of 2010.]
"zero-rated supply" means a supply of goods or services described in the Second Schedule.
(2) In this Act, a reference to a supply of goods or services in the course or furtherance of a business includes—
[S 2(2) am by s 2(b)(i) of Act 1 of 1999.]
(a) a reference to a supplies made by a supplier during any enterprise or activity which is carried on continuously or regularly, in the course or furtherance of which, goods or services are supplied to any other person for consideration, whether or not for profit, including any trade, profession or vocation and any concern of a continuing nature or in the form of an association or club;
(b) a reference to a supply of goods or services for the promotion of a business; or
[S 2(2)(b) am by s 2(b)(ii) of Act 1 of 1999.]
(c) anything done in connection with the cessation, liquidation or receivership or the intended cessation, liquidation or receivership;
[S 2(2) subs by s 2(d) of Act 2 of 1997, s 2(2)(c) ins by s 2(b)(iii) of Act 1 of 1999.]
3. Application of this Act to partnerships
(1) Where a firm consisting of two or more individuals in partnership is a registered supplier, the firm shall be taken, for the purposes of this Act, to be the supplier of any goods and services supplied in the course of the business of the firm; but in default of such registration, each partner shall be deemed to be the supplier of any such goods and services.
(2) Without prejudice to any other law providing for the sufficiency of any means of giving notice to a partnership, any notice of assessment or other notice given under this Act to a partnership may be addressed to the partnership in the name under which it is registered under this Act.
(3) Subject to this section, in determining for the purposes of this Act whether any goods or services are supplied to, or by, a partnership, no account shall be taken of any change in the partnership.
(4) Without prejudice to the operation of any law providing for the imposition of liability on members of a partnership, until the date on which a change in the partnership is notified to the Commissioner-General, a person who has ceased to be a member of a partnership shall be regarded as continuing to be a partner for the purposes of this Act and, in particular, for the purpose of any liability for tax or interest due from the partnership under this Act.
(5) Where a person ceases, for the purposes of this Act, to be a member of a partnership, any notice of assessment or other notice given to the partnership under this Act that relates to any matter—
(a) arising within or in connection with the prescribed accounting period during which he so ceased to be a member of the partnership; or
(b) arising within or in connection with any earlier prescribed accounting period during which, or during any part of which, he was for the purposes of this Act a member of the partnership;
shall be deemed to have been served on him.
3A. Application of Act to sole proprietorships
(1) Where a person in business as a sole proprietor is a registered supplier, that person shall be taken to be the supplier of any goods or services supplied in the course of the business and is liable for any tax due under this Act.
(2) Any notice of assessment or other notice given under this Act to a person referred to in sub-section (1) may be addressed to the person.
(3) Where a person referred to in sub-section (1) operates several businesses, the aggregate turnover from the businesses shall be used to determine the eligibility of the person for tax registration.
(4) Notwithstanding sub-section (3), a person referred to in sub-section (1) who operates several businesses may register the businesses separately if each of the businesses reaches the turnover threshold as prescribed by the Minister, by statutory instrument.
(5) A person referred to in sub-section (1) and operating several businesses shall furnish the Commissioner-General with details of the businesses.
[S 3A subs by s 3 of Act 3 of 2007.]
4. Application of this Act to unincorporated organisations
(1) Where a club, association or other unincorporated organisation is a registered supplier, the organisation shall be taken, for the purposes of this Act, to be the supplier of any goods and services supplied in the course of the business of the organisation; but in default of such registration, every member of the organisation shall be deemed to be the supplier of such goods and services.
(2) The names and other particulars of the members of the management committee of an unincorporated organisation that is a registered supplier shall be recorded in the register, and such members shall bear the liabilities of the organisation under this Act.
(3) Until the date on which a change in the management committee is notified to the Commissioner-General, a person who has ceased to be a member of the management committee of an unincorporated organisation that is a registered supplier shall be regarded as continuing to be such a member for the purposes of this Act and, in particular, for the purpose of any liability for tax or interest due from the organisation under this Act.
(4) Where a person ceases, for the purposes of this Act, to be a member of the management committee of an unincorporated organisation that is a registered supplier, any notice of assessment or other notice given to the organisation under this Act that relates to any matter—
(a) arising within or in connection with the prescribed accounting period during which he so ceased to be a member of the management committee; or
(b) arising within or in connection with any earlier prescribed accounting period during which, or during any part of which, he was for the purposes of this Act a member of the management committee;
shall be deemed to have been served on him.
(5) Where a person is a member of the management committee of an unincorporated organisation during part only of a prescribed accounting period, his liability for tax on the supply by the organisation of goods or services during that period, and any liability for payment of any interest or additional tax as a consequence, shall be limited to such proportion of the organisation’s liability as may be just in the circumstances.
[S 5 rep by s 2 of Act 44 of 2016 w.e.f. 1 January 2017.]
6. Application of this Act to Government agencies
(1) Except to the extent to which provision is otherwise made by or under this Act, this Act applies to a Government agency as though a supply of goods or services to it for the purposes of the performance of its official functions were a supply of the goods or services for the purposes of a business carried on by it.
(2) The Minister may, by regulation, provide for the modification of any provision of this Act, or of any regulation or rule made under this Act, in its application to a Government agency.
(3) ...
[S 6(3) rep by s 3 of Act 44 of 2016 w.e.f. 1 January 2017.]
PART II
VALUE ADDED TAX
(1) For the purposes of this Act, any supply of goods or services made by a taxable supplier, in the course or furtherance of a business, that takes place in Zambia on or after the tax commencement day, other than an exempt supply, is a taxable supply.
[S 7(1) subs by s 3 of Act 1 of 1999.]
(2) Although tax is not payable on a zero-rated supply, the provisions of this Act, apart from section 8, shall otherwise apply to a zero-rated supply in the same way as to all other taxable supplies.
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