Zambia Institute of Chartered Accountants (ZICA) has welcomed proposed reforms in the Income Tax Amendment Bill of 2025 aimed at promoting voluntary compliance.
Speak during the 2025 Fourth Quarter Media Briefing, ZICA President Yande Mwenye noted that the Bill reflects a positive shift toward a more supportive tax administration system that recognizes the realities faced by micro and small enterprises.
“The reduction of the late payment penalty for Turnover Tax from five percent to 0.5 percent per month is a pragmatic and progressive move that acknowledges cash-flow volatility among small businesses,” she added.
Mrs. Mwenye urged Parliament to introduce stronger safeguards to protect revenue and ensure transparency in the implementation of tax incentives.
She noted that the current penalty structure often creates an unsustainable debt burden, pushing struggling businesses back into informality, while the proposed adjustment is likely to encourage voluntary compliance.
Mrs. Mwenye also welcomed the introduction of Section 91A, which exempts taxpayers from penalties if they voluntarily disclose errors or omissions before detection by the Zambia Revenue Authority.
“This provision aligns Zambia with international best practice, particularly Organization for Economic Co-operation and Development (OECD) standards, which promote voluntary disclosure as a pathway to improved tax compliance,” Mrs. Mwenye stated.
She added that ZICA would like to see the voluntary disclosure framework extended to all tax types and embedded in a formal and permanent Voluntary Disclosure Programme to provide certainty and consistency for taxpayers.
Commenting on income tax concessions proposed for the Tanzania Zambia Railway Authority (TAZARA) Public Private Partnership, ZICA acknowledged government’s objective of attracting private investment to rehabilitate and modernize the strategic rail corridor.
She however cautioned that the bespoke fiscal regime could pose long-term risks if not carefully managed and monitored.
“Parliament must ensure that value for money requirements, transparency measures, and sunset reviews are built into this arrangement to prevent unintended revenue losses,” she emphasized.
Mrs. Mwenye further recommended periodic disclosure to Parliament of the fiscal cost and economic outcomes of the TAZARA concession, clarity on the interaction with withholding taxes and capital allowances, and confirmation that anti-avoidance, transfer pricing, and thin capitalization rules will continue to apply.
She urged lawmakers to strike a careful balance between investment promotion and fiscal sustainability, stressing that well designed tax reforms are essential for long term economic stability.
