Are you considering starting an import business in Zambia? If so, there are several things that you need to consider before you set up your business. Coming up below are some of the key considerations relating to Zambia import duty that you must take note of.
1. Duty-Free Items
- Some imported items do not attract import duty in Zambia. These include computer parts, fertilizers, seeds, pharmaceuticals, medical equipment, medicines, veterinary supplies, and chemicals in bulk.
2. Import Tariff bands
- Items that attract import duty are divided into four categories. These are:
- 0% – Productive machinery for agriculture, solar energy, aquaculture, and mining
- 0 – 5% – Capital equipment and raw materials
- 15% – Intermediate goods
- 25% – Finished goods
3. Types of import duty
- There are three types of Zambia import duty. These are:
- Customs duty
- Import excise duty
- Import VAT
4. Customs Valuation
- Customs valuation involves indicating the value of the import based on its CIF (Cost Insurance and Freight) charges. The customs value is essential, as it determines the amount of duty to be paid for the import.
5. Import VAT
- Import VAT (Value Added Tax) is collected on behalf of the country’s VAT division. It is applied to imported goods that attract VAT based on the country’s tax laws, at the applicable domestic rate. In Zambia, the standard rate is 16%.
- VAT is charged on the taxable value of the import, i.e.
CIF Value + Customs Tariff + Excise Duty * the applicable rate of 16%.
- Import VAT is not charged on goods that are zero-rated or tax-exempt.
6. Customs Duty
- Customs duty is the money levied on all goods that enter the country. In Zambia, the customs duty rates range from 0 to 40%.
7. Excise Duty
- It is a tax levied on selected goods that are luxurious in nature (non-essential) or have externalities. Examples of these goods are tobacco, selected motor vehicles, cosmetics, alcoholic drinks, etc.
8. Carbon Emission Surtax
- Carbon Emission Surtax is one of the levies that is unique to Zambia import duty regulations. It is an annual charge on imported vehicles that are already in the country and is based on the engine capacity of the vehicle.
9. Assessment of duties and taxes
- To determine the amount of tax payable, the Value for Duty Purposes (VDP) is required. VDP, the Kwacha equivalent of CIF, is made up of:
- The price payable for the imported goods
- Insurance charges for the transportation of the imported goods
- Freight charges
- Any other costs associated with importation up to the port of entry in Zambia
10. Calculation of duty/tax
- Import duty in Zambia is calculated using the following formula.
Duty/Tax = (Value for Duty Purposes – VDP) * (Duty/Tax Rate)
Now that you have all the information you need regarding Zambia import duty, you are all set to begin your import venture! Don’t forget, though, this is the only guide you’ll need to get you through!