What is Value Added Tax (VAT) in Zambia?

Value Added Tax (VAT) is an indirect tax levied on the supply of taxable goods and services in Zambia under the Value Added Tax Act, Chapter 331 of the Laws of Zambia. Introduced on 1 July 1995, VAT is administered by the Zambia Revenue Authority (ZRA) at a standard rate of 16%.

How do you add VAT to a price in Zambia?

To add VAT at 16%, multiply the VAT-exclusive amount by 1.16. For example, an item priced at K1,000 excluding VAT: K1,000 x 1.16 = K1,160 including VAT. The VAT component is K1,000 x 0.16 = K160.

How do you remove VAT from a price in Zambia?

To extract the VAT-exclusive amount from a VAT-inclusive price, divide by 1.16. For example, K1,160 / 1.16 = K1,000 exclusive of VAT. Alternatively, calculate the VAT portion as: inclusive price x 16/116. In this case, K1,160 x 16/116 = K160.

Which goods and services are exempt from VAT in Zambia?

Under the First Schedule of the VAT Act (Cap 331), exempt supplies include water, health and medical services, education, books and newspapers, public transport (buses with 14+ seats, air, rail, and boat), non-commercial land and property transfers, financial and insurance services, gold bullion, funeral services, gaming and betting, kerosene, and trade union subscriptions.

What is the VAT registration threshold in Zambia?

A business must register for VAT in Zambia if its taxable turnover exceeds K800,000 per annum or K200,000 per quarter. Businesses with turnover below these thresholds may register voluntarily. Registration is done through the Zambia Revenue Authority.

What is the difference between VAT exempt and zero-rated in Zambia?

Both exempt and zero-rated supplies carry no VAT for the buyer. The key difference is input tax recovery. Zero-rated suppliers (e.g. fresh food, exports) can claim back VAT paid on their business inputs. Exempt suppliers (e.g. education, financial services) cannot recover input VAT. Zero-rated supplies are taxable at 0% under the Second Schedule of the VAT Act (Cap 331), while exempt supplies are listed in the First Schedule.

How is VAT calculated in Zambia with an example?

VAT is calculated at 16% of the taxable value. Example: Goods priced at K5,000 excluding VAT. VAT = K5,000 x 0.16 = K800. Total VAT-inclusive price = K5,800. To reverse the calculation and find the VAT-exclusive price from K5,800: K5,800 / 1.16 = K5,000.

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Value Added Tax in Zambia

Common Exempt and Zero-Rated Supplies

Category	VAT Treatment
Fresh food & agriculture	Zero-rated
Exports	Zero-rated
Medical supplies & drugs	Zero-rated
Water & sanitation	Exempt
Health & medical services	Exempt
Education	Exempt
Financial & insurance services	Exempt
Public transport (14+ seats)	Exempt

VAT at a Glance - Value Added Tax Act (Cap 331)

Standard Rate

On all taxable goods and services unless exempt or zero-rated

16%

Registration Threshold

Per year (or K200,000 per quarter)

K800,000

Returns Due

Of the following month (electronic filing)

18th

Frequently Asked Questions

What is VAT in Zambia?

Value Added Tax (VAT) is an indirect tax charged on the supply of goods and services in Zambia. It is administered by the Zambia Revenue Authority under the Value Added Tax Act (Cap 331). The standard rate is 16%.

How do I add VAT to a price?

To add VAT, multiply the price by 0.16 to get the VAT amount, then add it to the original price. Or simply multiply by 1.16. For example, K1,000 x 1.16 = K1,160 (VAT inclusive).

How do I remove VAT from a price?

To remove VAT from an inclusive price, divide by 1.16. For example, K1,160 / 1.16 = K1,000 (excluding VAT). The VAT portion is K1,160 x 16/116 = K160.

Which goods and services are exempt from VAT?

VAT-exempt supplies include water, health and medical services, education, books, public transport (14+ seat buses, air, rail, boat), non-commercial land transfers, financial and insurance services, and funeral services.

What is the VAT registration threshold?

You must register for VAT if your taxable turnover exceeds K800,000 per year or K200,000 per quarter. Businesses below this threshold can register voluntarily.

What is the difference between exempt and zero-rated?

Both mean no VAT is charged to the buyer. The difference is for the seller: zero-rated businesses can claim back VAT on their costs (input tax), while exempt businesses cannot. For example, a farmer selling maize (zero-rated) can reclaim VAT paid on fertiliser, but a school (exempt) cannot reclaim VAT on supplies.

How is VAT calculated? Show me an example.

Example: You buy goods for K5,000 (before VAT). VAT = K5,000 x 16% = K800. Total price = K5,000 + K800 = K5,800. To reverse: K5,800 / 1.16 = K5,000 (excluding VAT).

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Value Added Tax Act (Cap 331)

The full legislation governing VAT in Zambia, including rates, registration, and filing requirements.

Read the Act

ZRA VAT Guide

Official ZRA guide covering VAT registration, returns, exempt and zero-rated supplies.

View Guide

Exempt and Zero-Rated Supplies

Complete list of goods and services that are VAT-exempt or zero-rated in Zambia.

Learn More

View All Posts

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Sources

#	Issuer	Description
1	ZRA	Value Added Tax Official VAT rate, registration thresholds, and exempt supplies.	View
2	Parliament	VAT Act Cap 331 Legislative framework for value added tax in Zambia.	View

Zamcalc results are estimates only. Figures are based on publicly sourced rates from official Zambian authorities (ZRA, NAPSA, NHIMA, ZESCO, ERB, HELSB, BoZ and others) and are updated when laws or tariffs change. They should not be treated as professional tax, financial, or legal advice. Always verify with your employer, the relevant authority, or a licensed professional before making financial decisions. Zamcalc is not liable for any action taken based on these results.