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SMEs can tap into tax incentives, says ZRA


The Zambia Revenue Authority (ZRA) appeals to small and medium enterprises (SMEs) to take advantage of tax incentives on offer.

ZRA has considered that the taxation for business entities is much more complex than it is for employees, and as such offers three tax categories namely; ZDA Incentives, Income Tax Act Exemptions/Reliefs and Tax Relief by way of Double Taxation Agreements.

Speaking to 150 local business people during the second edition of the 2023 Business Clinic in Kalumbila District in November, ZRA Assistant Tax Consultant Christian Bwalya acknowledged that while large enterprises could seek expert advice on how to optimize their net profits, SMEs faced proportionally higher tax compliance costs annually. “Tax incentives under indirect taxes relate to value-added taxes which are applicable to all SMEs include zero-rating on equipment and machinery, zero-rating on agricultural equipment, and zero-rating on the export of taxable products,” Bwalya stated in a presentation titled Taxation in Today’s Businesses.

“Income Tax Act provides relief to businesses to carry over losses up to five subsequent years from the charge year in which losses were incurred. Other tax reliefs are by way of reduced tax rates on particular sources of income from agro-processing, farming, and rural enterprises among others,” he added.

According to the Ministry of Commerce, Trade and Industry, local SMEs represent 97 per cent of all businesses in the country, 70 per cent of Gross Domestic Product (GDP) and 88 per cent of employment.

For this reason, ZRA provided tax incentives to SMEs both local and international investors in a bid to establish their business ventures. Tax is a compulsory contribution to state revenue, imposed by the Government on employees’ income and business profits to provide social services including healthcare, education, salaries for public workers, and build public infrastructure such as roads, hospitals and schools among others.

Bwalya explained that the Authority categorises taxpayers by size as follows: Small Taxpayers (STO) are businesses with a turnover of K800,000 or less, Medium Taxpayers (MTO) are businesses with a turnover of K800,000 but less than K50 million, and Large Taxpayers (LTO) are businesses with turnover above K50 million.

Courtesy of the Zambia Development Agency (ZDA) and the First Quantum Minerals’ Trident Foundation Limited, the 2023 Business Clinic themed Sustainable Partnerships for Micro, Small and Medium Enterprises (MSMEs) Growth, new businesses officially registered and learned how to be tax-compliant by updating their records and create a supportive SMEs ecosystem.


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