ZAMBIA Trends and Developments Contributed by: Mulenga Chiteba, Constance Namatai Mwango and Diana Chisale, Mulenga Mundashi Legal Practitioners
Compliance and administrative considerations Implementation of MAT requires businesses to main - tain accurate records of total turnover and to comply with reporting and payment obligations in a timely manner. The measure also promotes transparency in business operations and reinforces corporate accountability within the broader tax framework. The Minimum Alternative Tax represents a proactive measure by the Zambian government to strengthen revenue mobilisation and ensure that all businesses contribute to financing public goods and services, irre - spective of profitability. By combining turnover-based taxation with a credit mechanism against income tax, MAT strikes a balance between fairness, predictability, and compliance within Zambia’s evolving corporate tax landscape. Amendments introduced by the Property Transfer Tax (Amendment) Act, 2025 Group reorganisations The 2025 amendment expands the relief available under Section 5 (2)(B) of the Property Transfer Tax Act to include share transfers that result in a change of shareholding within a company incorporated in Zambia. To qualify for this relief, all entities involved in the transfer must have been part of the same group for a minimum of three consecutive years immediately prior to the transaction. Before this amendment, a nil value for Property Trans - fer Tax was only permitted where shares were trans - ferred in a company incorporated outside Zambia as part of a group reorganisation. The 2025 amendment widens the relief to cover situa - tions where shareholding actually changes, provided that both the transferor and transferee have been members of the same group for three years or more. This refinement reinforces the anti‑avoidance purpose of the provision by ensuring that only bona fide, long-term intra‑group restructuring transactions benefit from the relief. Surrender/forfeiture of shares The surrender or forfeiture of shares at no value does not attract Property Transfer Tax (PTT), as long as the action is not undertaken with the intention of avoiding tax. This relief aims to facilitate authentic corporate restructurings by removing tax costs that would oth - erwise hinder such internal adjustments.
However, once those forfeited or surrendered shares are later transferred to another party, the subsequent trans - fer remains subject to PTT. This ensures that while legiti - mate internal reorganisations benefit from an exemption, any later change in ownership outside that context con - tinues to fall within the normal tax framework. VAT amendment on debt remission VAT debt remission The mechanism for writing off irrecoverable VAT debts was originally introduced under the Value Added Tax Act of 2008. This provision authorised the Minister, acting on the recommendation of the Commissioner- General, to remit VAT liabilities under defined circum - stances such as in cases of bankruptcy or winding up, debts outstanding for five years or more, pre- privatisation obligations, and instances where a tax - payer’s VAT registration had been cancelled. Although this framework offered some relief to taxpayers, it remained narrow in scope and lacked detailed pro - cedural guidance. The 2025 amendment substantially broadens and clarifies the remission framework. It sets out expand - ed eligibility criteria and more explicit conditions under which VAT debts may be written off, including: • cases involving deceased taxpayers where the estate is insufficient to settle outstanding VAT obligations; • accounts that have been inactive for more than ten years; • insolvency proceedings, now expressly recognised as valid grounds for remission; • continuation of relief for pre-privatisation VAT liabili - ties; and • small debts not exceeding ZMW200 that have remained unpaid for over ten years, where the cost of collection outweighs the value of the debt. Beyond enlarging the qualifying conditions, the amendment formalises the administrative process by mandating the submission of supporting documenta - tion and empowering the Commissioner-General to request additional evidence before recommending remission. This enhanced structure promotes trans - parency, improves administrative efficiency, and helps remove longstanding VAT debts that are realistically uncollectable.
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