Over the years, tax administration has shifted focus from revenue collection to the taxpayer. To enhance this focus, taxpayers have been segmented into three categories according to their turnover as they tend to have diverse tax issues which need to be addressed differently. The segmentation is as follows:

INCOME OF K20 BILLION AND ABOVE – (Large Taxpayer Office)
This category comprises persons whose annual turnover exceeds K20 billion. They include commercial banks and Bank of Zambia, insurance companies, and government ministries.

INCOME ABOVE K200 MILLION BUT BELOW K20 BILLION – (Medium Taxpayer Office)
Any person carrying out business in Zambia, whose annual turnover is above K200 Million but below K20 Billion, will fall under the normal income tax bracket. This category comprises local authorities, NGOs, government agencies, parastatals, partnerships and consultancies.
Such a taxpayer will be required to notify the Commissioner General within 30 days of commencement of business to initiate the Tax Registration Process. A Taxpayer Identification Number (TPIN), an individual or company account number, and a Pay As You Earn (PAYE) account Number (where applicable) will be issued within three days of registration. The business will be required to fulfill among other things the following obligations under CAP 323 of the Income Tax Act:

Provisional Tax
A Provisional Return based on the estimate of income and tax charged thereon, for the current charge year, computed in accordance with the tax rates for the charge year should be submitted immediately. The return of Provisional Income Tax is due on 30th June every year. Provisional Tax is due and is payable in quarterly installments as follows:
1st installment is due on 30th June and is payable by 14th July
2nd installment is due on 30th September and is payable by 14th October
3rd installment is due on 31st December and is payable by 14th January
4th installment is due on 31st March and is payable by 14th April
Penalties and interest are chargeable for late submission and/ or late payment of tax, and also for under estimation of Provisional Tax

Tax Rates
The current tax rates are as follows:
• Limited companies – 35% on profits
• Individuals –
First K 12,000,000 @ 0%
Next K 8,820,000 @ 25%
Next K 29,580,000 @ 30%
Balance @ 35%
However, income from farming and charities engaged in profit making activities is taxed at 15% on profits
Large Scale Mining Companies – 30%

INCOME OF K200 MILLION AND BELOW
Any person carrying on any business with an annual turnover of K200 Million or less will fall in this category. It will also include the income of any person whose business earnings are subject to Withholding Tax and it is not the final tax such as rental income, commissions, interest earned by companies, royalties earned by residents, etc.
For taxpayers falling under the Small Taxpayers category – Tax is charged at 3% on turnover and is remitted on a monthly basis

Annual Income Tax Returns
Following the end of each charge year, a self – assessed return of income supported by a set of business accounts is to be submitted. The following should be included:
A computation of tax due based on the relevant tax rates
A signed declaration that the return includes a full statement of the income liable to tax
If you use an accounting date other than 31st March, approval should be sought from the Commissioner General
The Due Date for submission of annual income tax returns is 30th September. Late submission of returns will attract penalties at the specified rate of returns

The current rates are as follows:
• Limited companies – (2000 penalty units) K360,000 per month or part thereof
• Individuals – (1000 penalty units) K180,000 per month or part thereof
Note: Taxpayers under the Small Taxpayer category are to submit Turnover Tax Remittance cards monthly. In a month where there are no sales, a NIL card will be submitted.

Appointment of an accountant or tax agent
If you have appointed an accountant or tax agent to deal with your tax matters, please send details in writing. Your letter should include a signed declaration that the accountant or agent has authority to access your records.
All returns should be submitted by the due dates. In case of cessation of business, the tax office should be advised immediately and final returns and financial statements submitted for PAYE and income tax on or before the due dates for the respective charge years. All outstanding tax liabilities must be settled.