Free invoice generator and tax tools for Zambia

A small business in Zambia deals with the Zambia Revenue Authority (ZRA) for almost everything. Business profit is taxed at 30% under the Income Tax Act, with 10% for agriculture. Losses can be carried forward for five years. Businesses with annual sales of K5,000,000 or less can pay turnover tax instead of income tax. Everything is filed and paid through TaxOnline, the TaxOnApp mobile app or TaxOnPhone (*858#).

If you employ people you also run Pay As You Earn (PAYE): you work out the tax, deduct it from wages and pay it over by the 10th of the following month with the Monthly PAYE Return, form ITF/P16. The Skills Development Levy is paid by the same date. Pension contributions go to the National Pension Scheme Authority (NAPSA) and health insurance contributions to the National Health Insurance Management Authority (NHIMA), which are separate bodies with their own returns.

VAT is charged at a standard rate of 16%, with zero-rated and exempt supplies. Every business must also record its sales through ZRA's Smart Invoice system. In 2026 ZRA still publishes the PAYE bands of K5,100, K7,100 and K9,200 a month, and at the time of writing no 2027 Budget Address had been delivered, so these are the rules for the 2026 charge year.

Turnover tax is the simplified regime for businesses with annual sales of K5,000,000 or less. It is charged on gross sales, not profit: nothing on the first K30,000 a year (K2,500 a month), then 5% on sales above that. It replaces income tax for the business. It is not open to partnerships, mining (except artisanal and small-scale mining), management and consultancy services, or individuals and partnerships running public service vehicles that carry fewer than 50 passengers. You file the return electronically and pay by the 14th of the following month, and keep records for at least six years. A late return costs 250 penalty units (currently K100) a month or part month, and late payment 0.5% a month or part month plus interest at the Bank of Zambia discount rate plus 2%. You can switch between turnover tax and income tax only at the start of a charge year. If you expect to pass K5,000,000, tell the Commissioner-General and you move to income tax the next charge year. You must tell ZRA within 30 days of starting business.