Zambia proposes higher preferential company-tax rates and mining dividend withholding tax

The Zambia Revenue Authority’s official tax-change overview specifies four company-tax increases. Farming and agro-processing income, including non-traditional exports from those activities, would rise from 10% to 15%. Income earned by producers of organic and chemical fertilisers would rise from 15% to 20%. Other non-traditional export income and income of companies adding value to copper cathode would each rise from 20% to 25%. The Budget Speech describes the policy more generally as a five-percentage-point increase for income currently taxed at 20% or below, so businesses should apply the ZRA’s listed categories rather than assume every preferential regime changes.^[1][2]

The minister also proposed raising withholding tax on dividends paid by mining companies from 0% to 15%. Mining groups should therefore model the proposed domestic cost for distributions from Zambian mining companies, while separately testing recipient residence, treaty entitlement, beneficial ownership and any final statutory conditions.^[1][2]

Minimum alternative tax would be limited to businesses that record losses for three consecutive years. Section 14A of the Income Tax Act, inserted by Act No. 10 of 2025, currently charges the tax on total turnover, allows it as a credit against income tax for up to five subsequent charge years and excludes specified taxpayers; the Charging Schedule sets the rate at 1%. The Budget documents do not yet explain how ‘three consecutive years’ would operate for reorganisations, short periods or changes of ownership.^[1][2][3][4]

For multinational groups, the practical work is to map Zambian income streams to the named preferential categories, forecast 2027 mining dividends, and identify entities with consecutive losses. The speech says the measures would take effect on 1 January 2027 and contemplates amendments to the Income Tax Act, but no 2027 amendment Bill or enacted clauses were opened for this review. Groups should treat the package as scenario-planning input and monitor Parliament and the Gazette before changing returns, withholding or provisions.^[1][2]