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Value Added Tax Penalties

Late Return Penalty - K180, 000 per day or 5% of the tax due, whichever is higher.

Late payment penalty- 0.5% of the return amount . Interest is charged at the Bank of Zambia Discounted Rate plus 2%.

Late Registration Penalty- ten thousand fee units for each tax period. The business is also not allowed to claim input tax 3 months prior to registration

Non use of a cash register for retailers- first offence 30,000 penalty units, second offence 60,000 & third offence 90,000. 1 Penalty unit is K180

Income Tax Penalties

Incorrect Returns
  • Negligence - 17% of amount
  • Willful default - 35% of amount
  • Fraud - 52.5% of amount

Non payment
5% of the amount that remains unpaid
Interest-discount rate published by bank of Zambia plus 2%

Late Submission of returns
In case of an Individual, 1000 penalty units per month or part thereof
In case of Limited company 2000 penalty units per month or part thereof. I penalty unit is K180
It is important to note that Tax is debt to government and may be recovered by commissioner general either by distress or by suit in any court of competent jurisdiction. The commissioner General may also allow a taxpayer to pay tax in installments.

Recovery of Debt by Distress.
Any officer appointed for the purpose of carrying out the provisions of this act may under warrant by the Commissioner General Levy distress upon the goods and chattels of the person or partnership from whom tax is recoverable

The Appeal Process
If a person assessed is dissatisfied with Commissioner general's decision on his objection to the assessment, that person may by written notice to the chairperson within thirty days of the date of service of the written notice appeal to the Revenue Appeals Tribunal.

Either Party to an appeal to the tribunal may appeal to the High court from the decision of the court on any question of Law or question of mixed Law and fact but not on a question of fact alone.

An appeal from a decision of the high court under this section shall lie to the Supreme Court as it lies in the case of and as though it were a judgment of the high court made in the exercise of its original civil jurisdiction.

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