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Income Tax (Amendment) Act, 2008

Section 30 is amended so hedging losses can only be deducted from hedging income, and mining losses cannot be carried forward for more than ten subsequent charge years. The principal Act is amende…

amendmentcobalt pricingcommodity pricingcorporate taxcorporate tax deductionsdeductionsdefinitionsexchange ratesfiling deadlinesfinancial instrumentshedging lossesincome taxinterestlegislative amendmentlegislative draftingloss carry-forwardlossesmetal sales pricingminingmining expendituremining operationsmining taxmonetary amountsmortgage interestpenaltiesregulatory administrationrelated partiesreturnstax administrationtax compliancetax ratestransfer pricingvaluation thresholdwindfall tax

Jurisdiction: Zambia
Structure: 27 provisions
Citation: Act 1 of 2008
Dates: Legal dates not recorded

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“Section 30 is amended so hedging losses can only be deducted from hedging income, and mining losses cannot be carried forward for more than ten subsequent charge years.”

Section 30 is amended so hedging losses can only be deducted from hedging income, and mining losses cannot be carried forward for more than ten subsequent charge years. The principal Act is amended by inserting a new section after section 33B. A Zambian individual may deduct qualifying mortgage interest from income for the charge year, but only if the loan was used for the property within a reasonable period and the deduction is capped. This provision changes a monetary reference in subsection (2) from five hundred thousand kwacha to one million kwacha. This provision amends section 44 by replacing "K25,000" with "one hundred thousand kwacha" in clause (iii) of the proviso to paragraph (h).

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Section thirty of the principal Act is amended

Section 30 is amended so hedging losses can only be deducted from hedging income, and mining losses cannot be carried forward for more than ten subsequent charge years.

Section 3

Section sixty-four of the principal Act is amended in clause

The provision amends clause (i) of the proviso in section 64 by replacing “fifty thousand kwacha” with “one hundred and fifty thousand kwacha.”

Section 9

Section eighty-two A of the principal Act is amendecL in

This provision amends section 82A and adds a proviso excluding interest on bills of exchange drawn for 180 days or less, and treating certain excess payments on discounted treasury bills or similar instruments as interest when redeemed or re-discounted.

Section 15

The principal Act is amended by the insertion after the

This section amends the principal Act by adding a new Tenth Schedule after the Ninth Schedule.

Section 21

'No. 1 of 2008

Windfall tax is calculated using different formulas depending on whether the monthly average price exceeds the second or third trigger price.

Section 18

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Showing 27 of 27 provisions

Amendment 12Substitution 10Provision 3Commencement 2

§ 3Section thirty of the principal Act is amendedSubstitution

Section 30 is amended so hedging losses can only be deducted from hedging income, and mining losses cannot be carried forward for more than ten subsequent charge years.

3. Section thirty of the principal Act is amended- (a) by the insertion immediately after subsection (!) of the following new subsection: (IA) Subject to the other provisions of this section, any loss incurred in a charge year on hedging by a person, shall be deducted only from the income from hedging.; (b) in the proviso to subsection (2) by the deletion of clause (i) and the substitution therefor of the following clause: (i) in the case of any loss incurred by any person carrying on mining operations, the loss shall not be carried forward beyond ten subsequent charge years after the charge year in which the loss is incurred;.

Section 3Verify source

§ 4The principal Act is amended by the insertion immediatelyAmendment

The principal Act is amended by inserting a new section after section 33B.

4. The principal Act is amended by the insertion immediately after section/arty-three B of the following new section:

Section 4Verify source

§ 43C(1) Subject to the provisions of this section, anyCommencement

A Zambian individual may deduct qualifying mortgage interest from income for the charge year, but only if the loan was used for the property within a reasonable period and the deduction is capped.

43C. (1) Subject to the provisions of this section, any amount paid by a Zambian individual during a charge year by way of interest on a loan secured by a property in respect of the period of the charge year for which the property was owned shall be deducted from the income of the individual for that charge year, and before allowing deductions under subsection (3) of section thirty-seven and sections thirty, thirty-two, thirty-six, forty and forty-one: Provided that this section shall apply only to interest which is payable on such part of the loan as is used to defray money applied in the construction, purchase, income Tax [ No. 1 of2008 3 repair or improvement of the property in respect of the period from the date of such commencement of construction or purchase or for the payment of a premium on a mortgage protection insurance policy and the loan has been used within what the Commissioner General shall determine is a reasonable period in the circumstances from the date of such application. (2) The deduction to be allowed in a charge year under subsection ( I ) shall not exceed- (a) the amount which would have been allowable if the interest on the mortgage, or that part of it which is allowable, had been payable at the highest rate charged on a mortgage by a building society in a charge year; or (b) the assessable income ofan individual for that charge year before allowing a deduction under subsection (I) and the deductions under subsection (3) of section thirty-seven and sections thirty, thirty-two, thirty-six, forty and forty-one; whichever is less. (3) For the purposes of this section, "property" means immovable residential property within the Republic.

Section 43CVerify source

§ 5Section forty-three D of the principal Act is amended inSubstitution

This provision changes a monetary reference in subsection (2) from five hundred thousand kwacha to one million kwacha.

5. Section forty-three D of the principal Act is amended in subsection (2) by the deletion of the words "five l}undred thousand kwacha" and the substitution therefor of the words "one million kwacha".

Section 5Verify source

§ 6Section forty-four of the principal Act is amended in clauseSubstitution

This provision amends section 44 by replacing "K25,000" with "one hundred thousand kwacha" in clause (iii) of the proviso to paragraph (h).

6. Section forty-four of the principal Act is amended in clause (iii) of the proviso to paragraph (h) by the deletion of "K25,000" and the substitution therefor of the words "one hundred thousand kwacha". Amendment o'f section 43D A:mendmcnt lGf:section 44 •

Section 6Verify source

§ 7Section forty-jive A of the principal Act is amended by theAmendment

This provision amends section 45A by adding a new subsection that says, for subsection (1), “person” includes a partnership.

7. Section forty-jive A of the principal Act is amended by the insertion immediately after subsection (4) of the following new subsection: .Amendment -of::s.ection '115,\ (5) For the purposes of subsection (I), "person" includes a partnership.

Section 7Verify source

§ 8Section forty-six of the principal Act is amended by theAmendment

People liable to windfall tax must file a quarterly windfall tax return with the Commissioner-General, include specified sales and contract details, and file by the 14th day after each quarter ends.

8. Section forty-six of the principal Act is amended by the insertion immediately after subsection ( 4) of the following new subsections: AwenOment ,df:seciion 46 (5) Any person liable to windfall tax for any charge year shall furnish to the Commissioner-General a windfall tax return and such particulars as may be required for the purposes of ascertaining the income chargeable, if any, and the tax liability due, if any, under this Act. 4 [ No. 1 of2008 Income Tax • (6) The return required under this section shall (a) contain the quantities of the minerals sold; (b) contain the quantities of the concentrates or slime sold; (c) contain the contracts of sale for minerals, slime or concentrates; (d) be designated in kwacha; and {e) contain any other particulars as determined by the Commissioner-General. (7) The return referred to in subsection ( 5) shall be furnished to the Commissioner-General quarterly and not later than the fourteenth day following the end of each quarter. (8) Where a person fails to submit a return on or before the date provided for under subsection (7),that person shall be charged a penalty of - (a) in the case of an individual, one thousand penalty units per month or part thereof; or (b) in the case of a company, two thousand penalty units per month or part thereof: Provided that the Commissioner-General _may remit the whole or part of the penalty. Amendment of section 64 A�cndment g�J,.ec!Ion

Section 8Verify source

§ 9Section sixty-four of the principal Act is amended in clauseSubstitution

The provision amends clause (i) of the proviso in section 64 by replacing “fifty thousand kwacha” with “one hundred and fifty thousand kwacha.”

9. Section sixty-four of the principal Act is amended in clause (i) of the proviso by the deletion of the words "fifty thousand kwacha" and the substitution therefor of the words "one hundred and fifty thousand kwacha".

Section 9Verify source

§ 10Section sixty-f'our A of the principal Act is amendedAmendment

The Minister may make regulations, by statutory instrument, to administer this section.

10. Section sixty-f'our A of the principal Act is amended (a) in the proviso to subsection (2) by the insertion of the words "or from mining operations" after the word "services"; and (b) by the insertion immediately after subsection (2) of the following new subsection: (3) The Minister may, by statutory instrument, make regulations for the administration of this section. Insertion of new section 64B

Section 10Verify source

§ 11The principal Act is amended by the insertion immediatelyAmendment

The Commissioner-General may assess windfall tax, and people mining base or precious metals must pay it at the rates in the Tenth Schedule.

11. The principal Act is amended by the insertion immediately after section_sixty-f'our A of the following new section: Income Tax [ No. 1,o'f2008 5 64 B . The Commissioner-General may make a windfall 'tax assessment requiring any person carrying on mining operations of base metals or precious metals to pay a windfall tax at ,the rates set out in the Tenth Schedule. Windfall tax assessment

Section 11Verify source

§ 12Section seventy-seven of the principal Act is amended byrrheAmendment

People required to file a windfall tax return must pay the tax for the charge year by quarterly due dates.

12. Section seventy-seven of the principal Act is amended byrrhe insertion immediately after subsection (IC) of the following •new subsection: Arrm!rrm of section 77 (ID) Notwithstanding subsection (!), the tax payable for any charge year by any person required to submit a windfall:tax return under subsection (5) ofsectionforty-six shall be due 0n- (a) for the first quarter, thirtieth June; (b) for the second quarter, thirtieth September; (c) for the third quarter, thirty-first December; and (d) for the fourth quarter, thirty-first March.

Section 12Verify source

§ 13Section seventy-eight of the principal Act is amended in- AmnlrroltAmendment

The provision amends section 78 to add a new paragraph covering payment of any windfall tax within fourteen days.

13. Section seventy-eight of the principal Act is amended in- Amnlrrolt �:ction 78 subsection (I) by- (a) the deletion of the word "or" at the end of paragraph (al); (b) the insertion of the word "or" at the end ofparagraph·(b); and (c) the insertion immediately after paragraph (b) of the following new paragraph: (c) any amount of windfall tax within fourteen days.

Section 13Verify source

§ 14Section eighty-one C of the principal Act is amended in :theSubstitution

This provision amends Section eighty-one C by replacing the words "forty-fwe" with "forty-six" in the proviso to subsection (2).

14. Section eighty-one C of the principal Act is amended in :the proviso to subsection (2) by the deletion of the words "forty-fwe" and the substitution therefor of the words "forty-six".

Section 14Verify source

§ 15Section eighty-two A of the principal Act is amendecL inSubstitution

15. Section eighty-two A of the principal Act is amendecL in paragraph (b) of subsection (I) by the deletion of the proviso anctthe substitution therefor of the following new proviso: Arrm!rrm of section 8IC Arrmdnmt of section 82A Provided that- (i) this section shall not apply to interest payable on a bilkof exchange drawn for one hundred and eighty days"Or less; and (ii) the payment of any amount in excess of the original issue price for any treasury bill or any other similar financial instrument sold at a discount from face value shallibe deemed for the purposes of this section to be paymemt of interest when any such treasury bill or any oth<er similar financial instrument is presented for redempti@n or re-discount;. 6 [ No.I of2008 Income Tax Amendment of section 93 Amendment of section 97A

Section 15Verify source

§ 16Section ninety-three of the principal Act is amended bySubstitution

This provision changes section 93 by replacing “twenty thousand kwacha” with “one hundred thousand kwacha.”

16. Section ninety-three of the principal Act is amended by the deletion of the words "twenty thousand kwacha" and the substitution therefor of the words "one hundred thousand kwacha".

Section 16Verify source

§ 17Section ninety-seven A of the principal Act is amended byAmendment

For related-party sales of base metals or precious metals, the sale price must be the reference price.

17. Section ninety-seven A of the principal Act is amended by the insertion immediately after subsection (12) of the following new subsections: • (13) Notwithstanding any provision in this Act, for any transaction for the sale of base metals, precious metals or any substance containing base metals or precious metals, directly or indirectly, between related or associated parties, the applicable sale price of such metals or recoverable metals shall be the reference price. (14) For the purposes of subsection (13), "reference price" means- (a) the monthly average London Metal Exchange cash price; (b) the monthly average Metal Bulletin cash price to the extent that the base metals or precious metal prices are not quoted on the Londo.n Metal Exchange; (c) the monthly average cash price of any other metal the exchange market as approved by Commissioner-General to the extent that the base metal price or precious metal price is not quoted on the London Metal Exchange or Metal Bulletin; or (d) the average monthly London Metal Exchange cash price, average monthly Metal Bulletin cash price or any other monthly average metal market exchange cash price approved by the Commissioner-General, less any discounts on account of poor or low quality or grade. (15) For the purposes of subsection (13), "related or associated parties" include but are not limited to-- (a) parties connected directly or indirectly through shareholding, equity or partnerships; (b) any joint venture owned or operated jointly with or an unrelated party; (c) connected persons; or (d) parties connected through management and control. Income Tax [ No. 1 of2008 7 (16) For the purposes of subsection ( 15), two persons are connected with each other if- (a) one of them is an individual and the other is that person's spouse, a relative of that person or of that person's spouse, or the spouse of such a relative; or (b) one of them is a trustee of a settlement and the other is- (i) a person who, in relation to that settlement, is a settlor; or (ii) a person who is connected with a person falling within subparagraph (i). ( 17) For the purposes of subsection (16), "relative" means a brother, sister, ancestor or lineal descendant.

Section 17Verify source

§ 18The Second Schedule to the principal Act is amended inSubstitution

This section amends the Second Schedule by replacing a reference to “three million, six hundred thousand kwacha” with a reference to an amount taxable at zero per cent per annum under the Charging Schedule.

18. The Second Schedule to the principal Act is amended in subparagraph (3) of paragraph 5 by the deletion of the words ''three million, six hundred thousand kwacha" wherever they appear and the substitution therefor of the words "the amount taxable at the rate of zero per centum per annum as set out in clause ( c) of subparagraph ( I ) of paragraph 2 of the Charging Schedule."

Section 18Verify source

§ 19The Fifth Schedule to the principal Act is amendedCommencement

This section amends the Fifth Schedule to change mining tax deduction rules and related definitions, and also updates a low-cost housing threshold.

19. The Fifth Schedule to the principal Act is amended- (a) in the proviso to subparagraph ( 4) of paragraph I by the deletion of clause (i) and the substitution therefor of the following clause: (i) the cost of each housing unit does not exceed twenty million kwacha (in this paragraph referred to as low cost housing); (b) in subparagraph (5) of paragraph IO by the deletion of the word "leasing" and substitution therefor of the words "leased out under an operating lease"; (c) in paragraph 19- (i) in the definition of "deemed loss" by the deletion of the words "section twenty-one" and the substitution therefor of the words "paragraph 2111 ; (ii) by the deletion of the definition of "production charge year" and the substitution therefor of the following new definition: Amendment of Second Schedule Amendment of Fifth Schedule 8 [ No.I of2008 Income Tax "production charge year" means a charge year in which a mine first commences regular production; (iii) by the deletion of the definition " 1 953 new mine"; (iv) by the deletion of the definition "1 970 new mine"; (v) by the deletion of the definition "I 975 new mine"; and (vi) by the insertion in the appropriate place of the following new definition: "existing mine"means (a) any mine that has a production commencement date before I st April, 2008; (b) any mine that is not in regular production but whose development commenced before !st April, 2008; or (c) a combination of (a) and (b); (d) in paragraph 21- (i) by the deletion of the proviso to subparagraph (4); and (ii) in sub-paragraph (5) by the deletion of " 1 975 new" after the words "operator of a"; (e) in paragraph 22- ( i) by the deletion of subparagraph (2) and the substitution therefor of the following: (2) The deduction to be allowed for a charge year for a mine shall be calculated on a straight line basis at twenty-five per centum of the original expenditure: ' • Income Tax [ No. 1 of.2008 9 Pro;vided that- (a) the deduction for pre- production expenditure shall be one hundred per centum of the original expenditure in the production charge year to the extent that such expenditure has not already been allowed as a deduction; (b) seventy-fivi, per centum o'f the capital expenditure incurred in the charge year ending 3 1 st March, 2009, shall be allowed as a deduction 10 [ No. 1 of 2008 Income Tax in that charge year and the balance in the subsequent charge year; and (c) fifty per centum of the capital expenditure incurred in the charge year ending 31st March, 2010, shall be allowed as a deduction in that charge year and the balance shall be allowed equally in the subsequent two charge years.; (ii) by the deletion of subparagraph (3) and the substitution therefor of the following: (3) Where separate and distinct mining Income Tax [ No. l of 2008 11 are operations are carried on by a person m mines which not contiguous,the deduction allowable under subparagraph (2) shall be calculated separately according the to respective mines: Provided that this subparagraph shall net apply to any existing mine; and (iii) by the deletion of subparagraphs (4), (5), ( 6) and (7); and (iv) by the deletion df paragraph 23 and the substitution therefor of the following:

Section 19Verify source

Part

Schedule

§ 23Section 23Amendment

A person mining a producing mine cannot deduct losses from a separate non-contiguous mine in that year, except that the loss may be deducted later when the same mine starts regular production.

23. ( I ) Where a person is carrying on mining ·operations in a mine which is in regular production and is also the owner of, or has a right to work a mine which is not contiguous with the producing mine and from which the person has a loss in the charge year, the amount of such loss shall not be deducted in ascertaining the gains or profits from the mining operations: Provided t h at the loss incurred may be allowed as a deducti o n in ascerta ining the .Deductions for mining ,ex;penditure mn•non :.contiguous :mine 12 [ No. 1 of2008 Income Tax Amendment of Sixth Schedule Insertion of new Tenth Schedule Amendment of Charging Schedule gains or profits arising from the same mine when it c o m m e n c e s regular production. (2) The provisions of subparagraph (!) shall not apply to any existing mine.

Section 23Verify source

§ 20The Sixth Schedule to the principal Act is amended inSubstitution

This amendment changes the definition of “farm dwelling” in the Sixth Schedule from “ten million kwacha” to “twenty million kwacha.”

20. The Sixth Schedule to the principal Act is amended in paragraph I by the deletion in the definition of"farm dwelling" of the words "ten million kwacha" and the substitution therefor of the words "twenty million kwacha".

Section 20Verify source

§ 21The principal Act is amended by the insertion after theAmendment

This section amends the principal Act by adding a new Tenth Schedule after the Ninth Schedule.

21. The principal Act is amended by the insertion after the Ninth Schedule of a new Tenth Schedule as set out in the Appendix to this Act.

Section 21Verify source

§ 22The Charging Schedule to the principal Act is amendedSubstitution

The section changes several tax rates and thresholds in the Charging Schedule, including individual income bands, mining income rules, dividend tax for mining operations, and hedging income tax.

22. The Charging Schedule to the principal Act is amended- (a) in clause (b) of subparagraph (I) of paragraph I by the deletion of the words "one hundred and forty-four thousand kwacha per annum" and the substitution therefor of the words " six hundred thousand kwacha per annum"; (b) in subparagraph (I ) of paragraph 2- (i) by the deletion irt clause (c) of the words "six million kwacha" and the substitution therefor of the words "seven million, two hundred thousand K wacha"; and (ii) by the deletion of clauses (d), (e) and (f) and the substitution therefor of the following clauses: (d) on the balance of so much of an individual's income as exceeds seven million, two hundred thousand kwacha but does not exceed fourteen million, eight hundred and twenty thousand kwacha, at the rate of twenty-five per centum per annum; (e) on the balance of so much of an individual's income as exceeds fourteen million, eight hundred and twenty thousand kwacha but does not Income Tax [ No. 1 of2008 13 exceed forty-eight million kwacha, at the rate of thirty per centum per annum; and (f) on the balance o f so much of an individual's income as exceeds forty eight million kwacha at the rate of thirty five per centum per annum; (c) in paragraph 3- (i) by the deletion of clause (e) and the substitution therefor of the following clause: (e) where the income from mining operations does not exceed eight per centum ·of the gross sales, at the rate of thirty per centum per annum; (d) in paragraph 5- (i) by the deletion of the word "and"at the end ,of subparagraph (e); (ii) by the deletion of the full stop at the end ,o'f subparagraph (j) and the substitution therem0r of a semi-colon and the insertion of the word "and" after the semi-colon; and (iii) by the insertion immediately after subparagr'IJ!)n (f) of the following new subparagraph: (g) subject to the provisions of this Act, the rate of tax chargeable on income received from hedging in a charge year is thirty-five per centum per annum:; (e) in subparagraph (]) of paragraph 6 by the deletion ,o,'f clause (c) and the substitution therefor of the followitig clause: (c) at the rate of zero per centum for any dividenils paid by any person carrying on mining operations; and -- �:;;=��-�-� (j) where the income from mining operations exceeds eight per centum of the gross sales at the rate determinediin accordance with the following formula: y=30%+[a-(ab/c)] Where- y= the tax rate to be applied per annum; a= 15%; / ) 14 [ No. 1 of2008 Income Tax b= 8%; and c= the percentage ratio of the assessable income to gross sales: Provided that where any person has paid windfall tax in accordance with section sixty four B on any base metal or precious metal in any charge year in respect of that charge year, the rate applicable to income from such base metal or precious metal shall be thirty per centum per annum; and (iii) by the re-numbering of clause (f) as (g). (g) in the proviso to paragraph 7- (i) by the deletion in clause (i) of the words "twenty five per centum per annum" and the substitution therefor of the words "fifteen per centum per annum"; (ii) by the deletion of clause (iv); and (iii) by the renumbering of clauses (v) and (vi) as clauses (iv) and (v). Income Tax [ No. 1 oflD08 15 ._9 APPENDIX (Section 20) TENTH SCHEDULE (Section 64B) WINDFALL TAX PART ! COPPER

Section 22Verify source

§ 1(I) This Act may be cited as the Income Tax (Amendment)Amendment

This section defines key terms used in the Part, including trigger prices, the monthly average copper price formula, and the ruling exchange rate.

1. In this Part, unless the context otherwise requires - Interpretation "first trigger price" (FTP) means the copper price of five thousand, five hundred and twelve United States dol:lars (US$5,512) per metric tonne; "monthly average price" (MAP) means the weighted average London Metal Exchange copper price in respect of JI calendar month calculated in accordance with the following formula: MAP = Q,P 1+Q2P2+Q,P,+ ... +Q,.,P,.1+Q,P, Where- Qn= the quantity of copper or recoverable copper sales in metric tonnes in a calendar month; Pn= the corresponding London Stock Exchange daily closing cash price in United States dollars .p,,r metric tonne for grade A cathode; and n = the aggregate number of copper or recoverable · copper sales invoiced in the relevant calendar month; " ruling exchange rate " (RER) means the Bank of Zamlriia monthly average kwacha to United States dollar currency exchange rate; " second trigger price " (STP) means the copper price offfi thousand, six hundred and fourteen United States dollars (US$6,614) per metric tonne; and " third trigger price " (TTP) means the copper price of sevmi thousand, seven hundred and sixteen United States dollars (US$7, 716) per metric tonne.

Section 1Verify source

§ 2Section two of the principal Act is amended in subsectionAmendment

Windfall tax on mining income is charged using different formulas based on the monthly average price and trigger-price bands.

2. Subject to the provisions of this Act, windfall tax in respffiit of income from mining operations of a person for a charge year shall be charged as follows: 16 [ No. 1 of2008 Income Tax Windfall tax (a) where the monthly average price does not exceed the first trigger price, windfall tax shall not be payable; (b) where the monthly average price exceeds the first trigger price but does not exceed the second trigger price, the windfall tax shall be calculated in accordance with the f ollowing formula: WT = (RER *Q,)[25%(MAP-FTP)] Where- WT = windfall tax payable for the month; (c) where the monthly average price exceeds the second trigger price, but does not exceed the third trigger price the windfall tax shall be calculated in accordance with the f ollowing f ormula: WT = (RER*Q,) {[25%(STP-FTP)] + [50%(MAP-STP)l }; and (d) where the monthly average price exceeds the third trigger price, the windfall tax shall be calculated in accordance with the following formula: WT= ( R E R * Q , ) { [ 2 5 % ( S T P - F T P ) ] + [50%(TTP-STP)]+[75%(MAP0TTP)]} Income Tax [ No. 1 of2008 17 Interpretation PART II COLBALT

Section 2Verify source

Part

PART II

§ 3Section 3Provision

This section defines key price terms used in the Part, including trigger prices and the monthly average price.

3. In this Part, unless the context otherwise requires- " first trigger price " (FTP) means the co bait price of fifty five thousand, one hundred and sixteen United States dollars (US$55,116) per metric tonne; " monthly average price " (MAP) means the weighted average Metal Bulletin cobalt cash price in respect of a calendar month calculated in accordance with the following formula: MAP = Q,Pl+Q,P,+Q,P,+ ... +Q,.\P,.\ +Q,P, Q, Where- Qn = the quantity of cobalt or recoverable cobalt sales in metric tonne in a calendar month; Pn= the corresponding Metal Bulletin daily closing cash price in United States dollars per metric tonne; and n = the aggregate number of cobalt or recoverable cobalt sales invoiced in the relevant calendar · month; " ruling exchange rate " (RER) means the Bank of Zambia monthly average kwacha to United States Dollar currency exchange rate; " second trigger price " (STP) means the cobalt price of seventy-seven thousand, one hundred and sixty two United States dollars (US$77, I 62) per metric tonne; and " third trigger price " (TTP) means the cobalt price of eighty-eight thousand, one hundred and eighty-five United States dollars (US$88,185) per metric tonne;

Section 3Verify source

§ 4Subject to the provisions of this Act, windfall tax in respectProvision

Windfall tax on income from mining operations is charged under price-based rules: no tax if the monthly average price does not exceed the tint trigger price, and a formula applies if the price is between the first and second trigger prices.

4. Subject to the provisions of this Act, windfall tax in respect of income from mining operations of a person for a charge year shall be charged as follows: (a) where the monthly average price does not exceed the tint trigger price, windfall tax shall not be payable; I (b) where the monthly average price exceeds the first trigger Wmdfall tax price but does not exceed" the second trigger price, file windfall tax shall be calculated in accordance with tlhe following formula:

Section 4Verify source

§ 18'No. 1 of 2008Provision

Windfall tax is calculated using different formulas depending on whether the monthly average price exceeds the second or third trigger price.

18 . 'No. 1 of 2008 Income Tax (RER*QJ(25%(MAP-FTP)] WT = Where- WT = windfall tax payable for the month; (c) where the monthly average price exceeds the second trigger price, but dqes not exceed the third trigger price the windfall tax shall pe calculated in accordance with thecalcu!ated in accordance with the following formula: (RER*Q, ) { [25%(STP- FTP)] + WT,= [50%(MAP-STP)l}; and (d) where the monthly average price exceeds the third trigger price the windfall tax shall be calculated in accordance with the following formula: WT = (RER *Q, ) {[25% (STP-FTP)]+ [50%(TTP-STP)]+[75%(MAP-TTP)]} '

Section 18Verify source

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