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M&J Consultants · Budget Series · Zambia 2027

The Zambia 2027 Budget: what it changes for your business on 1 January

A free 29 page report. Part One sets out what the Minister announced on 6 November 2026. Part Two is our analysis of what it means for households, companies and fifteen sectors, and what to do before the new rates apply.

  • VAT at 16.5%, and why the change is a Smart Invoice systems job as much as a pricing one
  • The new 39.5% PAYE band, and the K37,000 or K34,000 question the Finance Bill still has to settle
  • Five points more company tax on every preferential rate below 30%
  • Minimum Alternative Tax limited to businesses with three consecutive years of losses
  • Customs and excise changes on tiles, aluminium, edible oils, solar equipment, sugar and plastics
  • A sector scorecard and a checklist by function for the weeks before 1 January 2027
29 pages. Published November 2026. Based on the Budget Address of 6 November 2026, its Annex and ZRA's 2027 Budget Highlights. All measures are proposals until Parliament passes the Finance Bill.

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We go through each measure as it applies to your business. The first conversation is free and carries no obligation.

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K284.8bntotal 2027 Budget
16.5%proposed standard VAT rate
39.5%proposed top PAYE band
K10.8bnnet yield of new measures

Why this matters now

Six proposals that reach almost every business in Zambia

The Minister's message was that stabilisation is done and the economy now has to grow. The tax measures send a second message: preferential rates are being phased out, high earners and consumers will pay more, and compliance will be enforced digitally.

01 Every invoice

VAT is proposed to rise to 16.5%

Half a point sounds small, but it touches almost every standard rated sale in the economy. A K1,160 purchase becomes K1,165. Because of Smart Invoice, this is a system configuration task as well as a pricing decision: tax codes in your ERP, point of sale and online store must switch over cleanly at 00:00 on 1 January 2027, and invoices that span the change need clear time of supply rules. Mismatches between Smart Invoice and your VAT return are the fastest way to attract an audit.

02 Payroll

A new 39.5% PAYE band for top earners

The Budget Address puts the new band on monthly income above K37,000. The Budget Annex says K34,000. The report shows what each reading costs and why payroll should be ready for both until the Finance Bill settles it.

03 Company tax

Five points on every preferential rate

Farming and agro processing move from 10% to 15%, fertiliser producers from 15% to 20%, non traditional exporters and copper cathode value addition from 20% to 25%. The stated aim is a single rate over time, so this is a first step and not the last.

04 Relief

Minimum Alternative Tax is narrowed

MAT currently applies whether a business declares a profit or a loss. Under the proposal it applies only after three consecutive years of losses, which removes a cash flow cost for companies with low but positive taxable profits.

05 Cost of living

The mobile money levy doubles in every band

A K500 transfer pays K1.60 instead of K0.80. Small, frequent transfers carry the highest effective rate, up to 0.64%. Sugar, chocolate, sweets and plastic bottles also come into the excise net.

06 Enforcement

Compliance goes digital

Smart Invoice becomes mandatory for export declarations. Notices served by email become legally valid, so objection deadlines can run from an inbox nobody is watching. Automatic exchange of information makes offshore accounts visible to ZRA.

What is inside

The facts first, then what to do about them

The report does two jobs. Part One is the record: the fiscal framework, the spending plan and every material tax and non tax change. Part Two is our view of what the changes mean in practice.

Part One · Budget highlights

  • p. 03 The Budget in twelve numbersK284.8 billion of spending, 82% of it funded from domestic revenue, and a deficit target cut to 3.0% of GDP.
  • p. 05 2026 in reviewGrowth, inflation and the Kwacha beat expectations. The fiscal year did not, and the report explains why.
  • p. 07 Where the money comes from, and where it goesThe resource envelope by tax head, spending by function, and the allocations that moved most.
  • p. 10 The K10.8 billion revenue packageAll 36 numbered measures grouped by purpose, with the estimated yield of each cluster.
  • p. 11 Income tax, VAT and Betting LevyCompany tax, PAYE, withholding tax on mining dividends, MAT, and the Smart Invoice housekeeping changes.
  • p. 13 Customs and exciseEvery tariff line that changed, from ceramic tiles and aluminium to solar equipment, sugar and plastics.
  • p. 15 Fees, permits and leviesMobile money, passports, immigration permits, tolls and the new mining rights fee schedule.

Part Two · M&J analysis

  • p. 18 Is the fiscal plan credible?Halving the deficit in one year, and what suppliers to Government should plan for if revenue falls short.
  • p. 19 Households and the cost of livingWhat the new PAYE band costs at each income level, and illustrative price effects on everyday goods.
  • p. 20 Companies and the end of preferential ratesA worked K10 million profit example at each rate, plus a cash flow checklist for finance teams.
  • p. 21 Sector by sectorMining, manufacturing, construction, trade, agriculture, tourism, energy and solar.
  • p. 25 Sector impact scorecardFifteen sectors rated positive, mixed or negative, with the tax drivers and the spending support for each.
  • p. 26 Watch points and inconsistenciesWhere the Budget Address, its Annex and the ZRA highlights disagree, and which reading to model.
  • p. 27 Your 2027 action checklistWhat finance, systems, payroll, supply chain, commercial and mining rights teams should do before 1 January.
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A worked example from page 19

What the new 39.5% band costs at each salary level

Only income above the threshold is taxed at the new rate, so an employee on K37,000 a month or less pays nothing extra. Above that, every additional kwacha carries 2.5 points more PAYE than it does today.

The report lays out its illustrations this way throughout, with the assumption stated beside the figures so you can substitute your own. It does the same for a K10 million company profit at each tax rate, and for the price of everyday goods after VAT, excise and the mobile money levy.

Extra PAYE under the proposal
Gross monthly incomeA monthA year
K37,000 or lessNilNil
K40,000K75K900
K50,000K325K3,900
K75,000K950K11,400
K100,000K1,575K18,900
K150,000K2,825K33,900

M&J illustration. Assumes the current 37% top marginal rate continues up to K37,000, so income above K37,000 pays an extra 2.5 points. Excludes NAPSA and NHIMA. If the Annex threshold of K34,000 is enacted instead, add K75 a month.

Sector impact scorecard

Who comes out ahead, and who pays

Our overall assessment of the direct effect of the 2027 tax and spending measures on fifteen sectors. It is a starting point for discussion. Individual businesses will be affected differently, and the report gives the spending support alongside each tax driver.

SectorNet impactMain drivers
Tourism and hospitality Positive Customs duty suspended on safari vehicles and hospitality equipment. Permit costs rise.
Artisanal and small scale gold Positive Royalty cut from 6% to 3% for sales to approved aggregators. Licence fees rise.
Local manufacturing Positive Higher duty and surtax on competing imports of tiles, aluminium, bags, edible oils and processed meat.
Sanitary products Positive Raw materials free of duty and VAT for local makers.
Agriculture and agro processing Mixed Company tax up from 10% to 15% and a new sugar excise, against K22.7 billion of sector spending.
Non traditional exporters Mixed Company tax up from 20% to 25%, and Smart Invoice required at export.
Financial services and fintech Mixed Mobile money levy doubled, and new reporting for exchange of information.
Logistics and clearing Mixed Truck head tolls up 50% and new offences, against direct bonding and a consolidated guarantee.
NGOs and public benefit organisations Mixed Registration fees up, and duty relief on second hand clothing removed.
Large scale mining Negative 15% withholding tax on dividends, a zinc export duty, and sharply higher licence and area charges.
Construction and real estate Negative Tiles, aluminium, float glass and cement bags all cost more.
FMCG, beverages and confectionery Negative VAT at 16.5%, sugar at K1 a kilogram, 20% on chocolate and sweets, K0.80 a plastic bottle.
Solar and off grid energy Negative Both the duty exemption and VAT zero rating are withdrawn.
Betting and gaming Negative Levy scope widened, with a daily penalty on agents who remit late.
Employers of expatriates Negative Permit fees up about 25%, spouse permits tripled, and the new top PAYE band.

M&J assessment based on the direct effects of announced measures. It does not cover second round effects, enacted wording or company specific facts.

Who wrote it

M&J Consultants, Lusaka

We are a multi disciplinary consultancy working with businesses across Zambia, Zimbabwe and the wider region: tax advisory and filing, accounting and company secretarial, payroll and HR, and enterprise software. Over a decade in practice, more than 500 clients served.

We publish this analysis each year because a budget speech is written for Parliament, not for a finance team. The work is in turning it into rates, dates and decisions.

10+years in practice
500+clients served
50+consultants

What it is built from, and where the sources disagree

  • Budget Address. Delivered to the National Assembly on 6 November 2026 by the Minister of Finance and National Planning, with paragraph references throughout.
  • Budget Annex. The 36 numbered revenue measures and their estimated yield.
  • ZRA 2027 Budget Highlights. The detailed tariff lines, housekeeping amendments and fee schedules.
  • PAYE threshold. The Address and ZRA say K37,000 a month. The Annex says K34,000.
  • Ceramic tiles. ZRA shows the duty rising from 25% to 40%. The Annex shows it rising from 5%.
  • Fringe benefits. Higher disallowances for employer provided cars and housing appear in the Annex only.

The Finance Bill will settle each point. Until then the report recommends modelling the more costly reading, and it lists every inconsistency we found on one page.

Before you fill it in

Straight answers

Is it really free?

Yes. The 29 page PDF is free. There is no payment, no card and no trial. If you ask for a Budget impact session, the first conversation is also free and carries no obligation. Any advisory, remodelling or systems work that follows is a paid engagement, quoted upfront before anything starts.

Are these changes already law?

No. Every measure in the report is a proposal announced in the Budget Address of 6 November 2026 and in ZRA's 2027 Budget Highlights. The proposals are subject to Parliamentary approval and may change before enactment. Unless stated otherwise, revenue measures are due to take effect on 1 January 2027. Check the enacted legislation before acting.

Where do the numbers come from?

From the 2027 Budget Address delivered by the Minister of Finance and National Planning on 6 November 2026, the Annex to that Address, and the Zambia Revenue Authority's 2027 Budget Highlights. Each page of the report cites the paragraph or section it relies on. Where the three sources disagree, the report says so and sets out both readings.

Is this tax advice?

No. It is general information only and is not tax, legal or investment advice. The illustrative calculations are simplified and depend on the assumptions stated beside them. Get advice specific to your circumstances before acting.

What happens to my details?

They go to M&J Consultants in Lusaka, and we use them to send you the report and to follow up on what you asked for. We do not sell, rent or share your details with anyone else. Ask us and we delete them. Our privacy page sets out the full position.

Get the 2027 Budget report

Free 29 page PDF. Read the pages for your sector, then work through the checklist before 1 January 2027.

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