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Tax Incentives
AGRICULTURE
  1. Guaranteed input tax claim for four years prior to commencement of production for Vatable agricultural businesses.
  2. Zero rating agricultural products and supplies when exported.
  3. VAT deferment on importation some agricultural equipment and machinery.
  4. Income tax at reduced rate of 10%.
  5. Farm improvement allowance at 100% on fencing, brick or stone wall and an allowance of K10 million for farm occupied by farm workers.
  6. Farm works allowance at 100% for the full cost of stumping and clearing, works for prevention of soil erosion, boreholes, wells, aerial and geophysical surveys and waterconservation.
  7. Dividends paid out of farming profit are exempt from tax for the first five years the distributing company commences farming.
  8. Development allowance is given for any person who incurs expenditure on the growing of tea, coffee or banana plants or citrus trees or similar plants or trees.An allowance of10% of such expenditure shall be deducted in ascertaining the gains and profits of that business.
  9. No Import Duty on irrigation equipment and reduced Duty Rates on imports of other farming equipment.
  10. Reduced Customs Duty at 5% on pre – mixes, being vitamin additives for animal feed.
MANUFACTURING
  1. Refund of Zambian VAT on export of Zambian products by non – resident businesses under the Commercial Exporters Scheme.
  2. Guaranteed input tax claim for two years prior to commencement of production.
  3. Income from chemical manufacturing of fertilizers is taxed at a reduced rate of 15%.
  4. Capital allowances on industrial buildings used for the purposes of manufacturing shall be entitled to a deduction of 10% in case of low cost housing and 5% for other industrial buildings.
  5. Persons who incur capital expenditure on an industrial building are entitled to claim a deduction called Initial Allowance at 10% of the cost incurred in the charge year in which theindustrial building is first brought into use .
  6. Any person who incurs capital expenditure on an industrial building is entitled to an investment allowance at 10% of such an expenditure in the first year that the building is usedfor manufacturing purposes.
  7. Import Duty on PVC lining and eyelets used in the manufacture of shoes has been reduced to 5%.
  8. Import Duty on semi refined wax and cerechlor used in the manufacture of paint, and on tapioca starch with dextrose powder which is used in the manufacture of biscuits hasbeen reduced to 15%.
  9. Import Duty on various textile machinery has been reduced to 0% and all woven fabrics of polyester imported for further processing, all imported sewing threads and gray fabricshas duty reduced to 0%
  10. Reduced Import Duty on the following inputs used in manufacturing:
(a) Crude Coconut(copra) oil of subheading 15131100 to 5%;
(b) Plates Sheets, film, foil and strip of unsaturated polyesters of heading 3920.63.10 to 5%.
  1. Suspension of Import Duty on machinery, equipment and capital goods for assembling of motor vehicles, trailers, motorcycles and bicycles.
MINING
  1. Guaranteed input tax claim for seven years on pre – production expenditure for exploration companies in the mining sector.
  2. Any mining company holding a large – scale mining license carrying on the mining of base metals is taxed at 30%.
  3. Other mining companies are taxed at 35%.
  4. Dividends paid by a company holding a large – scale mining license and carrying on the mining of base metals is taxed at 0%.
  5. 100% mining deduction on capital expenditure on buildings, railway lines, equipment, shaft sinking or any similar works.
  6. The debt equity ratio has been reduced from 2.1 to 3.1, to encourage further investment in the Mining Sector.

       
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