| OCTOBER 2023 – ZAMBIA
BUDGET SPEECH FOR 2024
It is important that employers note the following:
Budget speech and proposed tax changes
On Friday, 29 September 2023, Minister Itumbeko Musokotwane delivered the 2024 budget to the National Assembly.
Budget highlights
· The proposed 2024 budget amounts to ZMW177.9 billion or 27.8% of GDP, compared to the 2023 budget of ZMW167.3 billion or 31.4% of GDP.
· In 2023, global economic growth is expected to slow down to 3.0% from 3.5% recorded in 2022.
· Government’s objective is to:
· Attain a real GDP growth rate of at least 4.8%;
· Maintain international reserves to at least three months of import cover;
· Reduce fiscal deficit to 4.8% of GDP;
· Increase domestic revenue to at least 22% of GDP;
· Reduce inflation to the 6-8% medium-term target band;
· Limit domestic borrowing to no more than 2.5% of GDP.
· In 2024, Government will continue to increase access to quality education through infrastructure development.
Proposed tax measures
· Increase the exempt threshold for PAYE from ZMW 4,800 per month to ZMW 5,100, along with a reduction in the top bracket rate from 37.5% to 37.0% and other bracket adjustments.
· Replace the definition of electronic fiscal devices (EFDs) with electronic invoicing systems (EISs) and provide for the use of EISs.
· Provide for exemption from the mandatory use of EISs.
· Implement an EIS that will enable the Zambia Revenue Authority to have real-time access to business transactions, prevent the use of fake invoices in VAT refund claims and ensure that only qualifying entities claim deductions.
· Revise the definition of approved pension fund to clarify that approval is to be granted by the Pensions and Insurance Authority (PIA) and not the commissioner-general.
· Remove the mandatory provision for new businesses to write a notice to the commissioner-general within 30 days when they are in receipt of their first income.
· Commence consultations in 2024 to introduce a unified Tax Administration Act that will, among others, enable the harmonisation of tax treatment across different tax types and ease tax administration; and
· Amend the Zambia Revenue Authority Act to introduce a whistleblower reward in 2024 that will enable the reward of whistleblowers who disclose information leading to the recovery of tax.
· Exempt the Zambia Revenue Authority from the provisions of the Data Protection Act No. 3 of 2021. |
