Value Added Tax (VAT) is a consumption tax charged on most goods and services in Zambia at a standard rate of 16%. Whether you are a business owner calculating VAT on your invoices or a consumer trying to understand the tax on your purchases, this guide covers the essentials.
Use our VAT calculator to add or remove VAT from any amount instantly.
How VAT works
VAT is collected at each stage of the supply chain. When you buy something, the seller charges you 16% VAT on top of the price. The seller then remits this to ZRA, minus any VAT they paid on their own purchases (input tax). The net effect is that VAT is ultimately borne by the final consumer.
For consumers: VAT is simply an extra 16% on the price of goods and services. You pay it and the seller remits it to ZRA.
For businesses: You collect VAT from customers (output tax), deduct VAT you paid on purchases (input tax), and remit the difference to ZRA.
Adding VAT to a price
To calculate the VAT-inclusive price from a base price:
VAT amount = Base price x 16%
VAT-inclusive price = Base price + VAT amount
Or simply:
VAT-inclusive price = Base price x 1.16Example
A product costs K500 before VAT:
VAT = K500 x 16% = K80
Price including VAT = K500 + K80 = K580Removing VAT from a price
If you have a VAT-inclusive price and need to find the base price:
Base price = VAT-inclusive price / 1.16
VAT amount = VAT-inclusive price - Base priceExample
A receipt shows K1,160 including VAT:
Base price = K1,160 / 1.16 = K1,000
VAT = K1,160 - K1,000 = K160Quick reference table
Price (excl. VAT) | VAT (16%) | Price (incl. VAT) |
|---|---|---|
K100 | K16 | K116 |
K500 | K80 | K580 |
K1,000 | K160 | K1,160 |
K5,000 | K800 | K5,800 |
K10,000 | K1,600 | K11,600 |
K50,000 | K8,000 | K58,000 |
K100,000 | K16,000 | K116,000 |
VAT for businesses
Input and output tax
As a VAT-registered business, you deal with two types of VAT:
Output VAT - the VAT you charge your customers on sales
Input VAT - the VAT you pay on business purchases
Each month, you calculate: VAT payable = Output VAT - Input VAT. If your input VAT exceeds your output VAT, you can claim a refund from ZRA.
Registration thresholds
You must register for VAT if your taxable turnover exceeds:
K800,000 per year, or
K200,000 in any single quarter
You can also register voluntarily below these thresholds if it benefits your business (for example, to claim input VAT credits). For more detail, read our VAT registration threshold guide.
Filing deadlines
VAT returns are filed monthly with different deadlines depending on the method:
Electronic filing: 18th of the following month
Manual filing: 5th of the following month
Electronic filing gives you 13 extra days. See Electronic vs manual VAT filing for a detailed comparison.
Exempt and zero-rated supplies
Not everything attracts VAT at 16%. Some goods and services are:
Exempt - no VAT is charged and no input VAT can be claimed (e.g. financial services, medical services, education)
Zero-rated - VAT is charged at 0% but input VAT can still be claimed (e.g. exports, certain basic foodstuffs)
The distinction matters for businesses: exempt supplies mean you cannot recover input VAT on related purchases, while zero-rated supplies let you claim input VAT back.
For a comparison with the simplified turnover tax regime, see Turnover tax vs VAT in Zambia.