Zambia Ministry of Finance and National Planning, Situmbeko Musokotwane, has announced a series of tax increases aimed at raising additional revenue for the country’s K33.6 billion supplementary budget, eliminating the need for further borrowing.
In his recent presentation to Parliament, Dr. Musokotwane outlined the Supplementary Estimates No.1 for 2025, highlighting tax hikes that will affect the average Zambian’s weekend spending.
Substantial Changes for New Tax Increase Includes:
- Excise Duty on Spirits and Wines: Increased from 60% to 80%.
- Clear Alcohol Tax: End of a 40% duty suspension, replaced with a fixed 50% tax.
- Cigarette Tax: Excise duty per 1,000 sticks raised from K452 to K750.
- Betting Industry Tax: Introduction of a 10% excise duty on betting services to formalize the sector and reduce revenue loss from unregulated operations.
- Sugary Beverages Tax: Doubling of excise duty on fizzy drinks from K1 to K2 per liter.
- Withholding Tax on Government Securities: Increased from 15% to 20%, which may affect returns for local banks and individual investors.
Minister Musokotwane emphasized that these measures are designed to enhance domestic resource mobilization without resorting to borrowing. An additional K1 billion is expected to be raised through regulatory levies from agencies like the Energy Regulation Board and the Civil Aviation Authority
The proposed changes in the new taxes, are set to take effect in July. As a result, Zambians may need to adjust their spending habits in light of these developments.
