Income Tax (Amendment) Act, 2012

3. Section thirty-seven of the principal Act is amended by the deletion of the words "one million, eighthundred and sixty thousand Kwacha", wherever they appear, and the substitution therefor of the words "three million and sixty thousand K wacha".

4. Section sixty-four A of the principal Act is amended in subsection (2) by the deletion of the words "two hundred million Kwacha" and the substitution therefor of the words "eight hundred millionKwacha".

5. Section sixty-five of the principal Act is amended in subsection (2) by the deletion of the words "eighty-seven".

6. The principal Act is amended by the repeal of section seventy-four and the substitution therefor of the following new section:

74. (1) The President may enter into an agreement, which may have retrospective effect, with the Government of any other country or territory- (a) to prevent, mitigate or discontinue the levying, under the laws of the Republic and of such other country or territory, of taxes in respect of the same income; or (b) for the exchange of information on tax matters or for mutual assistance in tax matters with the objective of rendering reciprocal assistance- (i) in the determination of credits and exemptions in respect of Zambian tax and foreign tax; Income Tax (Amendment) [No.10 of2012 219 (ii) in the provision of data on fraud, civil and criminal tax offences; (iii) in the administration and collection of taxes under the tax laws of the Republic and such other country or territory; (iv) in the carrying out of tax examinations in Zariibia or abroad; and (v) in the carrying out of simultaneous or joint tax examinations. (2) Any information received by a country or territory under an agreement entered into under subsection (1) shall be treated as secret in the same manner as information obtained under the domestic laws of that country or territory and shall be disclosed only to persons or authorities involved in the assessment, collection enforcement, prosecution or determination of appeals in relation to, the taxes under this Act. (3) Subsection (2) shall not be construed so as to impose on a country or territory the obligation to- (a) carry out administrative measures at variance with the laws and administrative practices of that country or territory; (b) supply information which is not obtainable under the laws of that country or territory or under the laws of Zambia; or (c) supply information whlch would disclose any trade, business, industrial, commercial or professional secret or trade process, or information, the disclosure of which would be contrary to public policy. ( 4) The Minister shall lay a copy of an agreement referred to in subsection (1) before Cabinet for approval. (5) The President shall, as soon as practicable after the conclusion and approval of any.agreement under this section, notify the public of the terms of the agreement by statutory instrument, and the agreement shall, from the date of commencement of the statutory instrument, have effect as if enacted under this Act as long as the agreement has the effect oflaw in the other country or territory. 220 No.10 of2012] Income Tax (Amendmen�l Amendment of section 78

7. Section seventy-eight is amended- (a) by the deletion of subsection (1) and the substitution therefor of the following: ( 1) a person who fails to pay tax in accordance with section seventy-seven- (a) on or before the date on which the tax is due; (b) within thirty days of the date ofnotice of assessment from which the tax assessed is due; or (c) in the case of provisional tax, within fourteen days of the date on which that payment is due; is liable to the penalty specified in subsection (2); and (b) in subsection (2), by the insertion, immediately after the words "each month", of the words "or part thereof'. Amendment of section 87

8. Section eighty-seven of the principal Act is amended by the insertion, immediately after subsection (5), of the following new subsection: (6) Notwithstanding subsection (1) to (5), where a person, pursuant to subsection (1 ), claims that the pay-as­ you-eam tax for any charge year has been paid or is deemed to have been paid in excess by deduction or otherwise, that person shall make the claim, in writing, or ]:,y way of return to the Commissioner-General, not later than six years after the end of the charge year to which the claim relates.

9. Section ninety-seven B of the principal Act is amended by- (a) the deletion of subsection (2); and (b) the renumbering of subsection (3) as subsection (2). Amendment of section 97B Amendment ofSecond Schedule

10. The Second Schedule to the principal Act is· amended­ (a) in subparagraph (1) of paragraph 5- (i) by the deletion in item (j), after the semi colon, of the word "and"; (ii) by the deletion in item (k) of the full stop and the substitution therefor of a semi colon and the word "and"; and (iii) by the insertion, immediately after item (k), of the following: Income Tax (Amendment) [No. 10 of 2012 221 Amendment of Fifth Schedule (l) collective investment scheme to the extent to which the income is distributed to participants in the collective investment scheme; and (b) in item (aa) of paragraph 7, by the deletion of the words "first declaration" and the substitution therefor of the words "commencement of operations of the approved investment".

11. The Fifth Schedule to the principal Act is amended- (a) in paragraph 4A by the deletion of the word "approved" and the substitution therefor of the words "operating in a multi-facility economic zone or industrial park declared"; (b) in subparagraph (5) of paragraph 10 by the insertion, immediately after the word "farming", of a comma and the words "agro-processing";and (c) in paragraph 22 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 twenty-five percent of the original expenditure to the extent that equipment, plant, machinery or anything related to capital expenditure as defined under paragraph 19 ofthisPartisbrought into use in the carrying out of mining operations and the expenditure has not already been allowed as a deduction.

12. The Ninth Schedule to the principal Act is amended in Part II by the deletion of the figure "200,000,000" and the substitution therefor.of the figure "800,000,000". Amendment of Ninth Schedule

13. The Charging Schedule to the principal Act is amended­ (a) in subparagraph (!) of paragraph 2 by- (i) the deletion in item (c) of the words "twenty-four million K wacha" and the substitution therefor of the words "twenty-six million, four hundred thousand Kwacha"; Amendment of Charging Schedule (ii) the deletion in item (d) of the words "twenty-four million K wacha" and "thirty-three million, six hlllldred thousandKwacha" and the substitution therefor of the words "twenty-six million, four hundred thousand Kwacha" and "thirty-six million K wacha", respectively; 222 No. 10 of 2012] Income Tax (Amendment) (iii) the deletion in item (e) of the words "thirty-three million, six hundred thousand K wacha" and "sixty-eight million, four hundred thousand Kwacha" and the substitution therefor of the words "thirty-six million Kwacha" and "seventy million, eight hundred thousand Kwacha", respectively; and (iv) the deletion in item (j) of the words "sixty-eight million, four hundred thousand K wacha" and the substitution therefor of the words "seventy million, eight hundred thousand Kwacha"; (b) in paragraph 5 by- (i) the insertion in item (b), immediately after the word "farming", of the words "and agro-processing"; (ii) the insertion in item (d), immediately after the word "from", of the words "the production of organic fertiliser and"; (ii) the deletion of items (e), (j) and (g) and the substitution there for of the following: (e) on the income of a business enterprise operating in a priority sector, multi­ facility economic zone or industrial park declared under the Zambia Develop­ ment Agency Act, 2006, tax shall be charged at- (i) zero percent for a period of five years starting from the year of commencement of operations of the approved investment; (ii) fifty percent from the sixth to the eighth year after commence­ ment of operations of tl).e approved investment; and (iii) seventy-five percent from the ninth to the tenth year; (j) the Commissioner-General shall withdraw the incentives granted under item (e) if a business enterprise fails or neglects to fulfil its pledge for employment of citizens of Zambia under the Zambia Development Agency Act, 2006; Act No. 11 of2006 Act No. II of2006 Income Tax (Amendment) [No. 10 of 2012 223 (g) tax to be deducted from any dividend declared by a company operating in a priority sector, multi-facility economic zone or industrial park declared under· the Zambia Development Agency Act, 2006, shall, for a period of five years from the date of commencement of operations of the approved investment, be at the rate of zero percent per annum;, Act No. 11 of2006 (c) in paragraph 7, by the deletion of items (i) and (ii) and the substitution there for of the following: (i) tax required to be deducted from any payment of interest arising from savings or deposit accollnts held with financial institutions to an individual under section eighty-two A shall be deducted at the rate of zero percent per annum; and (ii) tax required to be deducted from any payment of interest, other than interest arising from savings or deposit accounts held with financial institutions to a.'l individual u.,der section eighty­ two A shall be deducted at the rate of fifteen . percent per annum and shall be the final tax; and (d) by the insertion of the following new items: (iv) tax required to be deducted from the payment of a management or consultancy fee deemed under section eighteen to be from a source within the Republic shall be at the rate of twenty percent; and (v) _tax required to be deducted from the payment of royalties to a non-resident deemed under section eighteen to be from a source within the Republic shall be at the rate of twenty percent. 224 1 J