Zambia: 2023 Budget overwiew
On Friday the 30th of September the 2023 budget address was hosted by the honorable Dr. Situmbeko Musokotwane.
Below is a brief summary of the proposed changes that will affect personal income taxes in Zambia:
Increase the exemption threshold for Pay As You Earn (PAYE) to K4,800 per month from K4,500, reduce the marginal tax rate for the second income bracket to 20 percent and adjust the income bands accordingly.
The measure is intended to improve the standard of living among households by increasing the disposable income of employees and self-employed individuals.
- Increase tax credits for persons with disabilities to K600 from K500 per month. This measure is intended to increase the disposable incomes of persons with disabilities and thereby contribute to their improved livelihoods.
Make it mandatory for all employers to submit the TPIN for all their employees in the Pay As You Earn return.
The measure is intended to improve tax compliance and safeguard revenue. Additionally, employees will quickly know if their PAYE contributions are being submitted correctly to ZRA by their employers through individualized statements
which will become possible to produce once this measure is implemented. The employers will also reduce the need for PAYE audits thereby reducing the cost of compliance.
Align the Income Tax Act with the Pension Scheme Regulations Act by:
(a) The deletion of the Fourth Schedule to the Income Tax Act;
(b) Providing in the Income Tax Act that a pension approved under the Pension
Scheme Regulations Act is exempt from tax; and
(c) Inserting the approval criteria in the Pension Scheme Regulation Act that
was covered in the fourth schedule of the Income Tax Act but is not in the Pension Scheme Regulation Act.
This measure seeks to align the Income Tax Act with the Pension Scheme Regulations to streamline the process of approving pension funds.
The changes are proposed to take effect from 1 January 2023.
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