Income Tax (Amendment) Act,
This section changes several definitions and sets rules for converting certain foreign-currency payments into kwacha.
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- Zambia
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- Act 6 of 1999
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About this statute
This section changes several definitions and sets rules for converting certain foreign-currency payments into kwacha. If a resolution says a dividend will be paid to holders registered on a future day, the dividend is treated as accruing on that future day. This section amends a section of the principal Act by deleting specified words from subsections (1) and (2). This provision amends section 18 of the principal Act by deleting certain words in subsection (3) and replacing them with different words. This section amends section 21 of the principal Act, including replacing “two million kwacha” with “three million kwacha” in subsection (5).
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Provisions of Income Tax (Amendment) Act,
Showing 47 of 47
- 2 Verify source ↗
Section rwoofthe principal Act is amended in subsection (I)
This section changes several definitions and sets rules for converting certain foreign-currency payments into kwacha.
2. Section rwoofthe principal Act is amended in subsection (I) (a) by the insertion in the appropriate places of the following new Amendment of section 2 definitions: "bank" means a company that holds a banking licence granted under section four of the Banking and Financial Services Act; •· person with disability " has the meaning assigned to it under section two of the Persons with Disabili ties Act, 1996; Cap. 387 Act No. 33 of t996 ( b) by the deletion in the definition of" Charging Schedule " of the words" personal allowances". I c) by the deletion in the definition of" effective shareholder" of the words " with his nominees or with its nominees " and the substitution therefor of the words" the nominees of that person ". Copies of this Act ""'.V be obtained from the Govenu11e111 Prilller, P.O. Box 30136, 1010/ l11saka. Price K3,000 each 128 No. 6 of 1999] Income Tax ( Amendmem) ( d) by the deletion of the definition of" former Zambia Consoli dated Copper Mining Company " and the substitution therefor of following new definition: ·· former Zambia Consolidated Copper Mining Company " means any mining division of the Zambia Consolidated Copper Mining Company sold under the Privatisation Act: ( e I hy the deletion of the definition of" handicapped person ". (/) hy the inse11ion immediately after subsection ( I , of the following new subsections- / I Al Subject to subsection ( I B) where u provision of this Act refers. expressly orby implication, to a payment of a specified amount which is denominated in k wacha and�he payment is made in another currency the amount of the payment, for purposes of that provision, shall be converted into k wacha at the appropriate rate published by the Bank of Zambia as at the end of the day on which the payment is due, irrespective of when the payment is actually made. I 18 J Where the payment referred to in subsection (IA is a payment of interest and the borrower has borrowed the principal in the course ofa business carried on by the bo,rnwer, the conversion required by subsection (IA) shall, subject to any direction by the Commissione,� Genend, be calculated as at the end of each day on which the interest accrues, irrespective of when payment of the interest is due. - 3 Verify source ↗
Section.five of the principal Act is amended in subsection (2)
If a resolution says a dividend will be paid to holders registered on a future day, the dividend is treated as accruing on that future day.
3. Section.five of the principal Act is amended in subsection (2) by the deletion of the proviso to paragraph ( a) and the substitution therefor of the following proviso: ·· Provided that where the resolution states that the dividend is to be paid to share or stock holders registered on a day in the future, the dividend shall be deemed to accrue to the share or stock holders on that day in the future: and " - 4 Verify source ↗
Sectionjimrteen of the principal Act is amended
This section amends a section of the principal Act by deleting specified words from subsections (1) and (2).
4. Sectionjimrteen of the principal Act is amended- /a! in subsection (I) by the deletion of the words" Pan Ill of": and 1/11 in ,uh,ection (2) hy the deletion of the words·· other than tnc(,me whid, the Commissioner-Genernl is prohibited C'ap. 3X(, ;\mcncJmcnl (If SCClit11\ 5 Amendment 111·-.i.:Ltion 14 .. I Income Tax (Amendmelll) [No. 6 of 1999 129 Amendment or section 18 Amcnclmcnl or:-1cc1ion 21 Repeal :111tl rcplaccmcnl of scclion 19A Foreign currency cxchagc gains and losses Amcndlncnl or �cclion 37 from including in any assessment under the proviso lo subsection (I) of section .l'ixty-three" - 5 Verify source ↗
Section eighteen of the principal Act is amended by the deletion
This provision amends section 18 of the principal Act by deleting certain words in subsection (3) and replacing them with different words.
5. Section eighteen of the principal Act is amended by the deletion in subsection (3) of the words "applies and ·• and the substitution therefor of" applies or where such a person "; - 6 Verify source ↗
Section twenty-one of the principal Act is amended
This section amends section 21 of the principal Act, including replacing “two million kwacha” with “three million kwacha” in subsection (5).
6. Section twenty-one of the principal Act is amended- ( a! in subsection ( I l by the deletion of the words "Part ID of'': and (/,/ in subsection (5) by the deletion of the words" two million kwacha" and the substitution therefor of the words" three million kwacha ". - 7 Verify source ↗
The principal Act is amended by the repeal of section twe11ty
This section amends the principal Act by repealing a section and replacing it with new text.
7. The principal Act is amended by the repeal of section twe11ty- 11i11e A and the substitution therefor of the following: - 29A Verify source ↗
( 1) Notwithstanding the provisions of section twe11ty
Foreign exchange gains or losses are taxed in the charge year when they are realised, except capital gains or losses and banks.
29A. ( 1) Notwithstanding the provisions of section twe11ty- 11i11e or any other provisions of this Act, any foreign currency exchange gains or losses. other than those of a capital nature. shall be assessable or deductible. as the case may be, in the charge year in which such gains or losses are realised, that is to say, in the charge year in which the person or partnership concerned is required to pay the additional kwacha or is allowed a rebate or a reduction in settlement of a foreign debt or liability. ( 2) Subsection ( 1 ) shall not apply in the case of a bank. (3) Where subsection (2) applies any amount treated as unrealised by virtue of subsection (I) in the charge year ending 31st March. 1999 shall be brought into account for tax purposes for the charge year ending 31st March, 2000. - 8 Verify source ↗
Section thirty-.\'even of the principa: Act is amended
This section amends section 37 of the principal Act and adds a definition of “world income” for subsection (3).
8. Section thirty-.\'even of the principa: Act is amended- ( a) in paragraph(/,) subsection (3) by the deletion of the-words " as defined in subparagraph (3) of paragraph 8 of the Charging Schedule"; and (/,) by the insertion after subsection (3) of the following new subsection: (:lA) For the purposes of subsection (3) "world income" in relation to any person means the total amount of that person's income from all sources, excluding the income which is chargeable to tax but which the Commissioner General is precluded from including in an assessment, the amount of income from each source being substantiated to the satisfaction of the Commissioner-Genera\; •· · 130 No. 6 of 1999] Income Tax (Amendment) Repeal and rcplm:cmcnl of section 43A Deduction fnr had and douht ru\ c.li!hls lnscruon or new -.cction 43B Dcductmn formmcn\l royally Cap. 213 Amcndmem t)f ',CClion -l6A - 9 Verify source ↗
The principal Act is amended by the repeal of section forty
This provision amends the principal Act by repealing section 43A and replacing it with a new section.
9. The principal Act is amended by the repeal of section forty three A and the substitution therefor of the following section: - 43A Verify source ↗
(I) A deduction shall be allowed in ascertaining the in
A deduction may be allowed for bad or likely bad debts, if the debts were included in income and the Commissioner-General is satisfied about their status.
43A. (I) A deduction shall be allowed in ascertaining the in come from any source for debts to the extent that the debts have been included in the income from that source and to the extent that they are proved to the satisfaction of the Commissioner-General to be bad or I ikely to become bad and, where there is no income from that source for the charge year for which such deduction is due that deduction shall be deemed to be a loss under section thirry. (2) Where a deduction has been allowed under subsection (I) in respect of any debt, and in the subsequent charge year part of all of the debt is recovered, the amount of the recovery or, where less. the total deductions allowed in one or more charge years in respect of that debt, shall be assessable in the charge year in which the recovery is received: Provided that where recoveries are effected in more than one charge year, the total amount a�sessable in each charge year after the first such charge year shall not exceed the amount of the recovery in that later year or, where less, the total of the deductions previously allowed less any recoveries assessable in previous charge years. - 10 Verify source ↗
The principal Act is amended by the inse,tion immediately
The principal Act is amended by inserting a new section after section 43A.
10. The principal Act is amended by the inse,tion immediately after sectionfo1ty-three A of the following new section: - 43B Verify source ↗
(I) A deduction shall be allowed in ascertaining gains
A business may deduct mineral royalty paid for a charge year when working out gains or profits.
43B. (I) A deduction shall be allowed in ascertaining gains or profits of a business of any mineral royalty payable and paid for a charge year in pursuance of the provisions of section sixty six of the Mines and Minerals Act. (2) This section shall not apply to any mineral royalty payable and paid for any charge year prior to the charge year ending 31st March 2000. - 11 Verify source ↗
Sectionfoi-ty-six A of the principal Act is amended
The section changes provisional income tax rules, requires revised returns when estimates become substantially incorrect, sets 28-day filing deadlines in certain cases, and imposes monthly penalties for non-filing.
11. Sectionfoi-ty-six A of the principal Act is amended- /a) in the proviso to subsection (I), by the deletion of the words " eight hundred and forty thousand kwacha " and the substitution therefor of the words" nine hundred and sixty thousand kwacha "; (h) in subsection (2)- (i) by the addition at the end of paragraph (a) of the words" but excluding any income which cannot be assessed by virtue of the proviso to subsection (I) of section sixty-three; /11come Tax (Amendment) [No. 6 of 1999 131 (ii) by the deletion in paragraph (b/ of the words " personal allowances, tax credit and which he is entitled " and the substitution therefor of the words " deducting any tax credit to which the individual is entitled, and any such computation shall exclude tax on income falling within Pait VI (Pay As You Earn) and any tax deducted from any other income"; (c) by the deletion of the proviso to subsection (3); ( cl) by the deletion of subsection ( 4) and the substitution therefor of the following subsection: (4) Where at any time in any charge year, whether because of a change in a person's circumstances or for any other reason, a person becomes aware that the estimate of provisional income contained in a return for that year made in respect of that person, including a return made under this subsection, is likely to be sub stantially incorrect, that person shall make a revised return of provisional income and tax for that year. (el by the insertion after subsection (4) of the following new subsections: (5) A revised return under subsection (4) shall be made within twenty-eight days of the time the person becomes aware of the changed circumstance.� referred to in subsec tion (4) and shall comply with subsection (2); (6) Where an individual is not required to make a return of provisional income and tax for any charge year by virtue of the proviso to subsection (I) but at a time subsequent to 30th June in that.year that proviso ceases to apply to the individual, that individual shall make a return in accordance with subsections (I) and (2) within twenty-eight days of that time. (7) In this Act any reference to a person's provisional income for any charge year is a reference to the estimate calculated in accordance with paragraph ( a) of subsec tion (2) of that person's income for that charge year. (8) In this Act any reference to any provisional tax which a person is liable to pay during any charge year is 132 No. 6 of 1999] Income Tax (A111e11dme111) a reference to the estimate calculated in accordance with paragraph (b) of subsection (2) of that person's tax liability for that charge year. (9) Where a person fails to submit a return or a revised return in accordance with this section. there shall be charged a penalty of- f 11) in the case of an individual. one hundred and seventy penalty units per month or pail thereof during which such failure continues; or (/,/ in the case of a company, three hundred and forty penalty units per month or part thereof during which such failure continues: Provided that the Commissioner-Geneml may remit the whole orprut of ai1y such penalty. ( I 0) Any reference to tax in subsection (7) of section sevemy-eight, and in sections sevenry-e;ght A, seventy-nine, seve11ty-11ine A, seventy-nine B, seventy-nine C, seventy nine D. eighty-three, eigluyfow� eighty-si.r, eighty-seven, and 11i11et_v-nvo includes a reference to provisonal tax. Amendment or .section 47 Amcndmenl. of SC<.:lion 62 - 12 Verify source ↗
Section forty-seven of the principal Act is amended by the
This provision amends section forty-seven of the principal Act by deleting subsection (4).
12. Section forty-seven of the principal Act is amended by the deletion of subsection (4). - 13 Verify source ↗
Section sixty-111·0 of the principal Act is amended
A company with a non-31 March accounting period may have to file its income or provisional income return for that accounting period instead of the charge year period.
13. Section sixty-111·0 of the principal Act is amended- ( a) by the insertion after subsection (3) of the following new subsections: (3A ) Where a company makes up the accounts of its business for a period in this section referred to as " the accounting period " ending on a date other than 3 1 st March and such accounts are or will be accepted by the Commissioner-Geneml for the purpose of dete1mining the gains or profits of the business in respect of a charge year, in accordance with the provisions of this section and that company is required by any provision of this Act to submit a return of income, including a return of provisional income and tax, for that charge year, that return shall be of income, or provisional income, for the accounting period for which relevant accounts are or will be made up. /11co1111• Tax (Ame11d111cnl) [No. 6 of 1999 133 rJBJ For purposes of subsection (3A) " relevant accounts " in relation to any charge year means the accounts which arc or will be submitted to the Commissioner-General forthe purpose of determining the gains or profits of the business in question in respect of that charge year. - 14 Verify source ↗
Section sixr,r-1hree of the principal Act is amcnded
This provision amends section 63 to let the Commissioner-General skip an assessment in some cases, require an assessment in others, and preserve liability for failure to pay tax.
14. Section sixr,r-1hree of the principal Act is amcnded raJ in subsection ( I )- (i) hy the addition of the words .. subsection ( IA) and ·· immediatdy after the words " provisions o f ": AmcmJmcnt of sci:1ion 63 (ii) hy the deletion in paragraph ( iv J to the proviso of the word " interest "; and (iii) hy the insc11ion immediately after paragraph (iv) of the pro\'iso of the following new paragraph: I 1·) in the case of an individual. interest from which tax in respect of that charge year has been deducted under section eigluy-two A. (/,) by the insertion immediately after subsection ( I ) of the following new subsections: r I A J In any case where a person has made pay ments of tax or provisional tax in respect of any chargt!' year under section forty-six or forty-six A if the Commissioner-General is satisfied that the person ha, no outstanding tax liability for that year, the Commissioner-General need not assess that person under this section. unless the person makes a request in writing for an assessment. ( I B) Where a person has made a return of tax under �ection forty-six but is assessed under this section for any amount. the assessment shall not relieve that person of any liability under section seventy-eighl in respect of ,my I'ailure to make any payment of tax. ( I C) Where a person has made payments of tax or provisional tax for a charge year but subsection ( IA) does not apply. the Commissioner-General shall make •an assessment in respect of that year and that person on I y for the amount by which the payments made differ from the amount of tax due for that year. 134 No. 6 of 1999] Income Ti,x (Amendment) (c) in subsection (2) by the deletion of" subsection ( I) " and the substitution therefor of" subsection ( I ) to / I C) ''. Amcndmcm of section 64 - 15 Verify source ↗
Section sixty1our of the principal Act is amended by the
This section amends section 64 of the principal Act by replacing “two hundred and sixty-six penalty units” with “fifty thousand kwacha” in the stated proviso.
15. Section sixty1our of the principal Act is amended by the deletion in item (i) of the proviso to paragraph (c) of the words •· two hundred and sixty-six penalty units " and the substitution therefor of" fifty thousand kwacha ". Amcndmem of section 71 - 16 Verify source ↗
Section seventy-one of the principal Act is amended by the
Regulations under this section may create offences for non-compliance, punishable by a fine of up to 10,000 penalty units, except where subsection (3) applies.
16. Section seventy-one of the principal Act is amended by the insenion immediately after subsection (6) of the following new subsection: (6A) Regulations under this section may create offences punishable with a fine not exceeding ten thousand penalty units for any failure to comply with the provisions of the regulations, other than a failure to which· subsection (3) applies. Amendment or section 77 - 17 Verify source ↗
Section seve111y-seve11 of the principal Act is amended
The section sets when income tax and provisional tax are due, allows deductions for certain prior payments or overpayments, and lets the Commissioner-General set payment form and extend payment times.
17. Section seve111y-seve11 of the principal Act is amended- ( a) by the deletion of subsection ( I ) and the substitution therefor of the following subsection: ( I ) Subject to the provisions of this Act, tax for any charge year payable by any person required to submit a return under section forty-six in respect of any income shall be due and payable on 30th September immedi ately following the end of the charge year. (b) by the insertion immediately after subsection ( I ) of the following new subsections: (IA) Any person who is liable to pay any tax in accordance with subsection ( I ) for any charge year may deduct from the amount due- ( a) the amount of any payment of provisional tax which the person has made for that charge year; and ( b) any amount of tax or provisional tax agreed by the Commissioner-General to have been over paid and which has not been refunded to that person or otherwise taken into account. ( 18) Any person who is required by section forty-six A to submit a return of provisional income and tax for any charge year shall make payments of provisional tax to the Commissioner-General in accordance with subsections (I CJ to (3). Income Tax (Amendment) [No. 6 of l999 135 ( I C) Provisional tax for any charge year required to be paid under subsection ( I B) shall be paid during the charge year in four instalments. each one of which shall be equal to one-quarter of the amount of provisional tax shown in the return, and shall be paid after: (a) I st instalment on 30th June; (bi 2nd instalment on 30th September; (c) 3rd instalment on 30th December; and ( di 4th instalment on 30th March; of tl1e charge year to which such return of provisional income relates. I c) by the deletion of subsection (2) and the substitution therefor of the following subsection: (2) Any person who is liable to pay any provisional tax in accordance with subsection ( 1B) for any charge year may deduct from the amount due any amount of tax or provisional tax agreed by the Commissioner-General to have been overpaid and which has not been refunded to that person or otherwise taken into account. (d} by the insertion immediately after subsection (2) of the following new subsections: (2A) A person who reduces an instalment of tax or provisional tax under this section shall- / a) ce11ify in writing to the Commissioner-General the amount of tax or provisional tax overpaid and the charge year to which it relates; mid (b) attach to that certificate a copy of the Commissioner-General's agreement that the tax or provisional tax has been overpaid. 12B) Where a revised return is required to be made under subsection (4) or (6) of section forty-six A by any date. the payments of tax required to be made in accordance with subsection (I B) shall- ( a) be made in instalments on the dates mentioned in subsection (I CJ as fall on or afierthat date; and ( b) be equal in amount to the amount of provisional tax shown in the return divided by four; 136 No. 6 of 1999] Income Tax I Amendment) but where an instalment payment has been made before an instalment of a revised amount is due under this subsection. the amount of that revised instalment shall be increased or reduced. as the case may require, so as to take into account the excess or shottfall in the earlier payment or payments. / e) by the deletion of subsection (3) and the substitution therefor of the following subsection: (3) Any payment required by this section shall be made in such form as the Commissioner-General may determine. (f) by the deletion of subsection (4) and the substitution thereforofthe following subsection: (4) Any tax payable by any person under an assessment made under subsection (3) of section sixty.-three or section sixt_\•:four shall be due and payable on the date notice of the assessment is given to the person under section sixf)·-five. (g) by th�deletion of subsection (5) and the substitution therefor of the following subsection: (5) The Commissioner-General, may extend the time limited by subsections ( 1 ), ( 1 C ) and (4) and where a time limit has been extended under this subsection, any reference elsewhere in this Actor any regulations made under it to the time when any payment of tax orprovisional tax is due sh al I be construed as a reference to the time as so extended. Amendment nr SCClJOn 78 (h) by the deletion of subsection (7). - 18 Verify source ↗
Section sevmf)•-eight of the principal Act is amended
If tax or provisional tax due under section 77 is not paid on time, a penalty applies.
18. Section sevmf)•-eight of the principal Act is amended- /a) by the deletion of subsection ( I ) and the substitution therefor of the following subsection: ( I ) Any person who fails to pay- ( a/ any amount of tax within one month: or ( b Jany amount of provisional tax with in fourteen days: of the date on which that payment is due under section seventy seven shall be liable to the penalty specified in subsection (2). / b) by the deletion of subsection (2) and the substitution therefor of the following subsection: (2) Any person who fails to pay tax or provisional tax in accordance with section seventy-seven shall be liable to pay, in respect of each month during which that Income Tax ( Amendment) [No. 6 of 1999 137 amount or any part of it remains unpaid, an amount equal to five per centum of that amount or so much of it as remains unpaid during the month in question. ( c I by the insertion immediately after subsection (2) of the following new subsection: (2A) Where any person contravenes more than one provision of this Act in respect of tax or provisional tax on the same income in respect of the same period of time that person shall. underthissection, be liable to pay only one penalty in respect of that contravention. I - 19 Verify source ↗
Section sevenrv-eight A of the principal' Act is amended in
This provision amends section 78A(1) of the principal Act by replacing the word “and” with “or” after “seventy-one.”
19. Section sevenrv-eight A of the principal' Act is amended in subsection ( I ) by the deletion of the word "and" immediately afterthe words ·· seve111y-011e " and the substitution therefor of the word " or ". Amendment of scclion 78A - 20 Verify source ↗
Section eighty-two of the principal Act is amended in subsec
This provision amends section 82 of the principal Act by deleting specific wording in subsection (1).
20. Section eighty-two of the principal Act is amended in subsec tion ( I ) by the deletion of " Pa11 I of Annexure B of Pal1 Ill of·•. Amendment or sel:tion 82 - 21 Verify source ↗
Section eighty-lH'o A of the principal Act is amended
This section requires the payer or partnership to give recipients a certificate within 14 days after month-end, and sets a monthly penalty for failing to provide required documents.
21. Section eighty-lH'o A of the principal Act is amended- /a/ in subsection ( I )- Amendment of section 82A ii) by the inse1tion at the beginning of the subsection of the words ·· Subject to the provisions of this section ": (ii) by the deletion in the proviso to paragraph (h! of the words " twenty thousand kwacha " and the substitution therefor of the words" twenty-five thousand kwacha "; (iii) by the deletion aftei-the words " in paragraphs /aJ. (h) " of the words " le) and Id) at the rate specified in Annexes E. F, G. and I, respectively, of Part Ifl of'' and the substitution therefor ofthe words " and ( c) at the rate specified in "; ( iv) by the deletion of paragraph ( d) and the substitution immediately after paragraph (c) of the following new paragraph: (d) commissions, other than commissions re ceived by an individual whose income is from employment or office: Provided that the Commissioner General may dete1mine that the provisions of paragraph/ c) or/ d) shall not apply in any , , -·� � 138 l'io. 6 of 1999] Income Tax (Amendme/11) panicular case and shall, in writing, direct the person or partnership concerned in that behalf; and the provisions of paragraph / c) or ( d) as applicable shall not apply to such person orpannership to the extent and to the period specified in such direction. ( b) in subsection ( 3). by the deletion of the words" of each charge vear. or such longer period as the Commissioner-General may generally orin any particular case allow, every person who or partnership which has made a payment referred to in subsection ( I), " and the substitution therefor of the words" of the month in which the payment from which tax is required to be deducted under subsection ( l ) was made, the person or partnership making the payment "; ( c) by the deletion of subsection ( 4) and the s'll bs ti tution therefor of the following subsection: (4)Withinfourteendaysoftheendofthemonthin which any payment under subsection (I) is made, the person or pannership making the payment shall furnish each person or partnership to or on behalf of whom a payment has been made with a certificate stating the amount of the payment made to or on behalf of such person or pannership, the amount of tax deducted therefrom, the date of issue of the certificate and such other particulars a� the Commissioner Geneml may require; ( d) in s'llbsection (5). by the deletion of the words " ten days after the date of payment shown thereon·· and the substitution thereforof the words ••fourteendaysaftertheendofthechargeyearin which the payment to which the certificate relates was made: " and / e) by the insertionaftersubsection(7)of thefollowingnew subsection: ( 8) Where a person fails to furnish the Commissioner Gen era I or any other person authorised b y the Commissioner-General with any document in accordance with the requirements of this sec tion . there shall be charged a penalty of- / a/ in the case of an individual one hundred and seventy penalty units per month or part thereof during which such failure continues; or ( b) in the case of a company, three hundred and forty penalty units per month or part thereof during which such failure continues: r Income Tax ( Amendme/11) [No. 6 of 1999 139 Provided that the Commissioner-General may remit the whole or part of any such penalty. - 22 Verify source ↗
Section ninety of the principal Act is amended
This provision amends section 90 of the principal Act by deleting one word and replacing a proviso paragraph.
22. Section ninety of the principal Act is amended / a) by the deletion of the word " eighty ": and (/11 by the deletion of paragraph (i) of the proviso and the substitution therefor of the following paragraph: Amendment of section 90 Ci I subject to paragraph (ii), where the amount of tax which a company is required by subsection (I) of section eighty-one to account for in any charge year is reduced by an amount of tax which has been deducted from dividends received by the company in that year, the amount of tax on income from dividends received by the company in that year which may beset off under this section against the tax chargeable on the company's in come for that year shall be the balance of that tax after any such reduction. - 23 Verify source ↗
Section ninety-jive of the principal Act is amended in subsec
This provision amends subsection (2) of section ninety-jive of the principal Act by deleting paragraph (c).
23. Section ninety-jive of the principal Act is amended in subsec tion (2) by the deletion of paragraph (c). - 24 Verify source ↗
Section ninety-jive B of the principal Act is amended by the
This provision amends section 95B of the principal Act by deleting specific words.
24. Section ninety-jive B of the principal Act is amended by the deletion of the words "or amounts treated as distributed under the provisions of section ninety-jive by those companies". - 25 Verify source ↗
Section 11ine1y,five D of the principal Act is amended
This section amends section 95D of the principal Act, adds an exception for certain lender-made commercial loans, and changes a kwacha amount from 20,000 to 10,000,000.
25. Section 11ine1y,five D of the principal Act is amended- Cll/ by the deletion in the definition of " grossed up equivalent of a loan " of the words "Part II of AnnexureB or Part ID of " and by the insertion after the word ·• Schedule" of the words ·· in respect of the income of an individual ": (b) in subsection (2) by the deletion of the words " to which the provisions of section ninety-five apply": and 1,·1 hy the insertion immediately after subsection (2) of the following new subsection: (2A / Subsection (2) shall not apply where the ordi nary business of the lender includes the making of loans and the loan is a nonnal commercial loan made in the ordinary course of that business. /di by the deletion in subsection ( 1 2) of '" twenty thousand kwacha ., wherever it appears and by the substitution therefor of ·· ten million kwacha ••. Amendment of section 95 Amendment of section 95B Amendment of section 95D 140 No. 6 of 1999] Income Tax ( Amendment) ln�cnion nr ncv. sccliom l)7A. 91B. 97C. 97/J Translcr pricing - 26 Verify source ↗
The principal Act is amended by the insertion immediately
The section requires related-party income to be taxed on an arm’s-length basis and lets the second taxpayer make or amend a claim within set time limits.
26. The principal Act is amended by the insertion immediately after section ninety-seven of the following new sections: 97 A. ( I ) In this section- .. actual conditions .. means conditions which are made or imposed between any two associated persons in their commercial or financial relations; •• arms length conditions " means conditions or no condi tions which would have been made or imposed if persons were not associated with each other. (2) The provisions of this section shall apply where by reason of the actual conditions having been made or imposed instead of the arms lengtl1 conditions there is, except for this section, a reduction in amount ofincometaken into account in computing the income of one ofthoseassociatedpersons referred to in subsection ( I ), in this section referred to as the first taxpayer, chargeable to tax for a charge year, in this section referred to as the income year. (3) The income of the first taxpayer chargeable to tax in the income year shall be computed for tax purposes on the basis that the arm's length conditions had been made or imposed, as between the first taxpayer and the other associated person referred to in subsection (2) instead of the actual conditions: and a computation on that basis is referred to as a computation on the ann's length basis. (4) If- / a) in the income year and by reason of the actual conditions. an amount of income received by that other person associated with the first taxpayer, in this section refen-ed to as. the second taxpayer, is increased: (b) that increase in income cotTesponds to the reduction in income of the first taxpayer referred to in subsection (2); and ( c) a claim under tl1is subsection has been made in writing by the second taxpayer to the Commissioner General; the second taxpayer's income chargeable to tax in the income year shall be computed on the arm's length basis for all tax purposes except for the purposes of sectionfort,v-six A. (5) For the purposes of this section- ( a) references to a reduction in an amount of income include references to a reduction to nil or to the accrual of a loss or an increased loss; and Income Tax (Amendment) [No. 6 of 1999 141 ( b) references to an increase in income include references to the reduction in a loss whether to a smaller amount or to nil. ( 6) Subsection ( 4 l shall not apply unless the amoun.tof income mentioned in paragraph (a) of that subsection would be taken into account in computing the mount of the second taxpayer's income chargeable to tax for the income year. (7) For the purposes of subsection (6) in a case where no loss accrues or a smaller loss accrues, as mentioned in paragraph ( a) of subsection (4) and in subsection (5), a profit shall instead be deemed to have accrued. (8) Where an assessment or an amended assessment is made on the first taxpayer and the computation of income on which it is based takes into account a different amount of income from that on which earlier computations were based, the second taxpayer may amend a claim under subsection (4) accordingly. (9) A claim by the second taxpayer under subsection (4) shall not be made in relation to an income year unless- ( a) the first taxpayer has made a return on the arm's length basis under section.fort_v-si, o�forty-suA for the income year or an assessment on the rum's length basis is made on that first tax payer for that year; and lb) it is made within threeyears ofthedateon which thatretum or. if earlier. that assessment is made, or such longer period a� the Commissioner-General may allow. ( 10\ A claim may not be amended under subsection (8) by reason ofan assessment or amended assessment unless the amended claim is made within one year of the date on which the assessment or amended i.Ll.isessment is made. ( 1 1 )Whereaclaimundersubsection(4)oranamendedclaimunder subsection (8) is allowed and the claimant has been or may be given credit by virtue of any agreement made under section sevenry-jouror undersevenr_,·-sl,forforeigntax, witl1inthemeaningofsectionseventy Jive or .,-e.,emy-si\; in computing the amount of that credit- ( a) the foreign tax to be taken into account as having been paid or ,Ls being payable by the claimant shall exclude ru1y amountoffrndgn mx which would not have been paid or payable if the computation of the income on which the foreign tax is chargeable had, so far as it includes income to which the claim or amended claim relates. been made on the unn' s length basis; and 142 No. G of 1999] Income Tax (Amendment) ..,_ (bl the amount of the income to betaken into account as having been received by the claimant and in respect of which the claimant is or may be given credit for foreign tax shall be detennined,sofaras it includes income to which the claim or amended claim relates, on the arm's length basis. ( 12) Any adjustment required to be made by virtue of this section shall be made by way of discharge or repayment of tax, by an amended assessment or otherwise and may be made notwithstanding that the adjustment relates to a charge year which ended more than six years earlier; and subsections (3 ), (4) and (5) of section eighty-seven shall apply to any excess tax due to the taxpayer under this section as they apply to an excess detennined under subsection ( I ) of section eighty-seven. - 978 Verify source ↗
Section 978
Section 97A does not apply in three specified situations, including certain business income computed from pre-1 April 1999 accounts, certain deductible interest, and certain allowances.
978. ( I) Section ninety-seven A (2) shall not apply in relation lo the computation of income of any person who carries on a business in so far as that income is detennined by referenoe to the accounts for that business for a period beginning before 1st April, 1999. (2) Nothing in section ninety-seven A shall apply in relation to any interest which is atlowable as a deduction under paragraph 22 of the Fifth Schedule to this Act or which would be so allowable but for the provisions of paragraph 22A of that Schedule. (3) Nothing in section ninety-seven A shall apply for the computation of any allowance which may, in accordance with sections thirty-three, thirry,four or thirty-four A of this Act, be deducted in ascertaining the profits or gains of a business or the emoluments of any employment or office. - 97C Verify source ↗
(I) For the purposes of sections ninety-seven A and
This section defines how certain terms in sections 97A and 97B are read, and lets the Minister make regulations for interpreting subsection (3).
97C. (I) For the purposes of sections ninety-seven A and 11i11ety-seve11 B- C a) any reference to a computation on the mm' s length basis shall be construed in accordance with subsection (3) of section ninety-seven A; (b) a return by a person or an assessment on a person is made on the a,m 's length basis if the computation of income on which it is based is made by virtue of subsection (3) of section ninety-seven A; (c) any reference to arrangements or agreements means any arragement or agreement whether legally enforceable or not. and includes a reference to understandings or mutual practices: and Non applicaLion or section 97A Pnwlliom, supplcmcn t;iry to 97A Income Tax (Amendment) [No. 6 of 1999 143 (d) ·· person " includes a partnership. (2) Section 11i11ety-seve11A applies whenever the conditions in question were made or imposed, whether before, on or after I st April, 1 999. (3) For the purposes of sections ninety-seven A and ninety-seven B conditions may be taken to have been made or imposed between associated persons in their commercial or financial relations-- (a} whether they are made or imposed in one arrangement or agreement or in a series of aiTangements or agree ments: and (b) where conditions are made or imposed in a series of arrangements or agreements, notwithstanding that (i) conditions made or imposed in one atTange ment or agreement differ from those made or imposed in another; or (ii) the parties to one arrangement or agreement differ from those to another; or (iii) any party to an arrangement or agreement is not associated with any other party to that or any other mangement or agreement. (4) The Minister may by regulations make supplementary provision for the interpretation of subsection (3). (5) For'the purposes of section ninety-seven A and ninety seve11 B ,one person is associated with another if- (a} one participates directly or indirectly in the management, control or capital of the other: or ( b} the same persons participate directly or indirectly in the management. control or capital of both of them. (6) The Minister shall make provision by regulations on the direct and indirect participation in the management, control or capital of a person. and different provision may be made in relation to difforent cases or different classes of each case. (7) For the purposes of section ni11e1y-seve11 A and ninery seven B where conditions are made or imposed between associ ated persons in their commercial or financial relations- ( a/ it shall be assumed, unless the contrary is shown to the satisfaction of the Commissioner-General, that dif- ferent conditions or no conditions would have been imposed if those persons were not associated: and 144 No. 6 of 1999] Income Tax ( Amendment) (I,) where a claim is made under subsection (4) of section ninety-seven A. it shall be for the claimant to prove that the claim satisfies that subsection. - 97D Verify source ↗
Section 97D
The Minister must make regulations that let a person join certain Revenue Appeal Tribunal appeals or make representations to the Commissioner-General on certain objections.
97D. (I) The Minister shall make regulations enabling a person. in such cases as may be prescribed in the regulations, to be joined as a party to an appeal to the Revenue Appeal Tribunal under section one hundred and nine or to make representations to the Commissioner-General on an objection against an assess ment under section one hundred and eight. (2) Regulations under subsection (I) shall apply only in cases where one of the grounds of the appeal or the objection relates to the question whether section ninety-seven A applies in relation to any computation relevant to the assessment or whether any computation has been made in accordance with that section. - 27 Verify source ↗
Section ninety-nine of the principal Act is amended
Section 99 of the principal Act is amended, including adding wording after “this Act” and deleting certain words.
27. Section ninety-nine of the principal Act is amended- (aJ by the addition in paragraph (a) after " this Act " of" or of section forty-six or forty-six A ": and Ohjcctions and appeal� involvins! lr:m:,;fcr � pricing. Amendment or scc.:tion 99 (b) by the deletion of the words ·· or by subsection (2) of section . " orty-stx fi Amendment of ,;ection 1 00 - 28 Verify source ↗
Section one hundred of the principal Act is amended
Section 100 is amended to add a new paragraph about failing to file a provisional return of income and tax, and to replace several percentage amounts in subsection (1).
28. Section one hundred of the principal Act is amended ( a) in subsection (I)- (i) by the insertion after paragraph ( a) of the following new paragraph: ( aa) fails to furnish a provisional return of income and tax in accordance with the requirements of section forty-six A: ( ii) in item (i) by the deletion of the words ·· fifty per cenrum " and the substitution therefor of" seven teen point five per centum "; (iii) in item (ii) by the deletion of the words " the amount .. and the substitution thereforofwords " thirty-five per centum of the amount "; and (iv) in item (iii) by the deletion of the words " one hundred and fifty percentum" and the substitution therefor of the words " fifty-two point five per centum ": ,,,,- (/,) by the deletion of subsection (2) and the substitution therefor of the following subsection: Income Tax ( Amendme/11 I [No. 6 of 1999 145 (2) Except forparagraph ( a). any reference in subsection ( 1 ) to tax or income includes a reference to provisional tax and provisional income respectively. - 29 Verify source ↗
The principal Act is amended by the deletion of the words
This provision amends the principal Act by replacing the words "handcapped person" with "person with disability" wherever they appear.
29. The principal Act is amended by the deletion of the words ·· handcapped person " wherever they appear and the substitution therefor of " person with disability ·•. - 30 Verify source ↗
The First Schedule to the principal Act is amended by the
This section amends the First Schedule by deleting specified words in paragraph 7.
30. The First Schedule to the principal Act is amended by the deletion in paragraph 7 of the words " other thaf livestock bought by a fanner for stud ". - 31 Verify source ↗
The Second Schedule to the principal Act is amended
This section amends the Second Schedule to the principal Act, including adding a new item in paragraph 7 and replacing an amount in paragraph 9.
31. The Second Schedule to the principal Act is amended- ( a) in paragmph 7. by the insertion after sub-paragraph (t) of the following new sub-paragraph: ( 11) by a person designated as an enterprise undertheSmall Enterprises Development Act, 1996 who has been gmnted the incentives provided under that Act. lb) in sub-paragraphs (4) and (5) of paragraph 9by the deletion of the words " two hundred and forty thousand kwacha " and the substitution therefor of" three hundred thousand kwacha ". - 32 Verify source ↗
The Fifth Schedule to the principal Act is amended
This provision amends the Fifth Schedule to the principal Act.
32. The Fifth Schedule to the principal Act is amended- / a J in sub-paragmph (5) of pm·agraph IO by the deletion of the words ·· fanning. manufacturing or tourism " and the substitution therefor of the words " farming, manufactur ing. tourism or lea�ing''. I bl by the deletion of the proviso to item (a/ of sub-paragraph (2) of paragraph 22; (cl by the deletion of sub-paragraph (7) of paragraph 22; and I di by the inse1tion immediately after paragraph 2 2 of the following new paragraph: - 22A Verify source ↗
Where i1t any time in any charge year a company has
If a company’s loans in a charge year exceed twice its equity, some interest on borrowings cannot be included in the amount allowed that year.
22A. Where i1t any time in any charge year a company has outstanding loans which in aggregate exceed an amount equal to more than twice the equity of the company at that time, any interest on borrowings which may be allowed in any charge year shall not include any amount of interest paid in that year in respect of so much of the borrowings in that year as exceed that amount; and where there is more than one loan, interest on bon-owings taken out earlier shall be allowed in priority to interest on later borrowings. Replacement of handicapped person" with "per.,;on with disability" Amendment of First Schedule Amendment of Secund Schedule Act No. 29 or 1996 Amendment of Fitih Schedule Disallow aru.:c o\ imcrcst in certain areas 146 No. 6 of 1999] Income Tax (Amendment) Repeal replacement of Charging Schedule
Part
Schedule
- 33 Verify source ↗
The principal Act is amended by the repeal of the Charging
This section replaces the Charging Schedule in the principal Act with a new Charging Schedule in the Appendix.
33. The principal Act is amended by the repeal of the Charging Schedule and the substitution thereforofthe the Charging Schedule set out in the Appendix to this Act. Income Tax (Amendment) [No. 6 of 1999 147 APPENDIX (Section thirty-three) THE CHARGING SCHEDULE (Section /2) PART ! TAX CREDIT
Part
Schedule and the substitution thereforofthe the Charging Schedule set
- 1 Verify source ↗
( I) Th is Act may be cited as the Income Tax (Amendment) Act,
This section sets the tax credit amounts for individuals and individuals with disability, and gives a formula for some individuals based on months spent living in the Republic.
1. ( I ) Su�ject to sub-paragraph (2) the tax credit referred to in Ta, credit subsection (2) of section fourteen which is appropriate- / a) to an individual for any charge year is ninety-six thousand kwacha. (b) to an individual who is a person with disability for any charge year is ninety-seven thousand two hundred kwacha. (2) The tax credit for any charge year appropriate to an individual to whom this sub-paragraph applies shall be equal to, A x B 12 where A is the amount of the tax credit apart from this sub-paragraph, and B is the number of months in the charge year in which the individual is living in the Republic for any time. (., ) Sub-paragraph (2) applies to any individual who- (aJ is resident in the Republic for the charge year in question but was not so 11'esident for the immediately preceding charge year and is not so re,ident for the immediately succeeding charge yem·; or (/,) is not resident in the Republic for the charge year in question, and who in either�ase is absent from the Republic for part of that charge year. PART II RATES OF TAX
Part
PART II
- 2 Verify source ↗
Section 2
This section sets income tax rates for an individual’s charge year income, with different rates for different income bands and for certain lump sums and gratuities.
2. (I) Subject to the provisions of this Act, tax in respect of the income of an individual fora charge year shall be charged as follows- ( a J on income received by way oflump sum payments, at the rate Individuals of ten per centum per annum: 148 No. 6 of 1999] Income Tax I Amendment/ I b) on any income falling within subsection (5) of section twentv one which is not exempt from tax under that subsection, ·at the rate of ten per centum per annum; (c) on the balance of so much of an individual's income a, does not exceed one million two hundred thousand kwacha, at the rate of ten per centum per annum; ( d) on the balance of so much of an individual's income as exceeds one million two hundred thousand kwacha but does not exceed one mil lion eight hundred thousand kwacha, at the rate of twenty per centum per annum; I e) on the balance of so much of the income of the individual as exceeds one million eight hundred thousand kwacha, at the rate of.thirty per centum per annum. (2)Whereinanychargeyearapersonreceivesincomebywayofagratuity under subsection ( I ) of section twenty-one and other income not being a lump sum, sub-paragraphs (c) to (e) of paragraph (I) shall apply separately to the income received by way of gratuity and to the other income. - 3 Verify source ↗
Section 3
This section sets income tax rates for certain companies and banks, with different rates depending on company type and, for banks, whether income is above or below K100 million.
3. ( I ) Subject to the provisions of this Act, tax in respect of the income of a person other than the income of an individual, a trust, deceased's e.state or a bankrupt's estate for a charge year, shall be charged as follows: (a) on the income of any company listed on the Lusaka Stock Exchange, at the rate of thirty per centum per annum; ( b) on the income of any company other than a bank, at the rate of thirty-five per centum per annum; ( c/ on so.much of the income of any bank as does not exceed one hundred million kwacha. at the rate of thirty-five per centum per annum; / d/ on so much of tl1e income of any bank as exceeds one hundred million kwacha, at the rate of forty-five percentum per annum. Companies eLc Trust i::tc. - 4 Verify source ↗
Subject to the provisions of this Act, tax in respect of the income
Tax on the income of a trust, deceased's estate, or bankrupt's estate is charged at 35% per year for a charge year, subject to this Act.
4. Subject to the provisions of this Act, tax in respect of the income of a trust, a deceased's estate or a bankrupt's estate for a charge year shall be charged at the rate of thirty-five per centum per annum. Special c,,scs - 5 Verify source ↗
Notwithstanding the provisions of paragraphs I and 4
This provision reduces tax on rural enterprise income for the first five charge years and sets maximum tax rates of 15% for farming income, qualifying export income, and fertilizer manufacturing income.
5. Notwithstanding the provisions of paragraphs I and 4- ( a) the tax chargeable on income received from a rural enterprise shall be reduced, for each of the first five charge years for which that business is ca!1'ied on, by such amount as equal to one-seventh of the tax which would otherwise be chargeable on that income; Income Tax (Amendment) [No. 6 of 1999 149 I/,) the maximum rate for income received from farming shall be fifteen per centum per annum: r c ! the maximum rate of tax on that portion of income which is determined by the Commissioner-General as originating from the export ofnon-traditional products shall be fifteen per centum per annum: and Id) the maximum rate of tax for income received from the chemical manufacture of fertilizer shall be fifteen per centum per annum. - 6 Verify source ↗
Tax required to be deducted from any dividend under section Withholding
Tax must be deducted from dividends at 15%, unless the Commissioner-General sets another rate to give effect to an agreement or the Second Schedule; dividends from former Zambia Consolidated Copper Mining Company are taxed at 10%.
6. Tax required to be deducted from any dividend under section Withholding tax eigh1y-one and section eigh1y-one A shall be deducted- r a! at the rate of fifteen per centum per annum; I I,) at such other rate as the Commissioner-General directs to give effect to the provisions of any agreement made under section sevemyjour, or to give effect to any provision in the Second Schedule: or I cl at the rate of ten per centum per annum for any dividend paid by any former Zambia Consolidated Copper Mining Com pany. - 7 Verify source ↗
Tax required to be deducted from any payment under section
Tax deducted under section 82A is charged at specified rates: 15% generally, 10% for interest paid by former Zambia Consolidated Copper Mining Company, and 25% for an individual’s other interest payments, with the 25% rate applying from 1 April 1999 as the final tax.
7. Tax required to be deducted from any payment under section eigh1_v-1wo A shall be deducted at the rate of fifteen per centum per annmn. Rate of tax to be deducted Provided that- Ii) tax required to be deducted from any interest paid by former Zambia Consolidated Copper Mining Company under sec tion eight,•-two A shall be deducted at the rate of ten per centum per annum: and (ii) in the case ofan individual, tax required to be deducted from any other payment of interest under section eighty-two A shall be deducted at the rate of twenty-five per centum per annum with effect from I st April. 1 999 and shall be the final tax. - 8 Verify source ↗
Any reference in this Act or in any other document to any
References to pre-amendment Charging Schedule provisions must be read as references to the corresponding provisions in this Schedule after the amendment takes effect.
8. Any reference in this Act or in any other document to any provision of the Charging Schedule as it had effect immediately before the coming into operation of the Income Tax (Amendment) Act. 1 999 shall be constrned as a reference to the conesponding provision of this Schedule ,.s it has effect thereafter. lntcrprcta tion 150 I '\ ' ' .,. ...
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