ZRA MOVES TO TAX ONLINE ADVERTISING, POLITICAL BROADCASTS

COLLECTION of Value Added Tax (VAT) from transactions made by non-resident electronic service providers such as online advertising and political broadcasts has been activated by the Zambia Revenue Authority (ZRA).

These include online advertising, online music streaming, movie streaming services, broadcasts for political, self-education packages, music, films, transport hailing and games of chance , among others.

This follows an announcement by Finance and National Planning Minister, Situmbeko Musokotwane, during the 2024 national budget presentation where he noted that the growing digital economy presented an opportunity for the country to expand the tax base and collect more revenue from non-resident suppliers.

The ZRA has, therefore, announced that effective April 1, 2024, Value Added Tax (VAT) would be levied on all Cross-Border Electronic Services that would be supplied to all resident consumers in Zambia.

The announcement was made by the ZRA Commissioner-General, Mr Dingani Banda, in a statement issued in Lusaka.

Mr Banda said Government had passed the necessary legislative framework to support the taxation of services provided by non-resident suppliers following the budget pronouncement. “The law provides for charging of VAT on Cross-Border Electronic Services under VAT Amendment Act number 27 of 2023 and Statutory Instrument number 18 of 2024 and soon to be published Value Added Tax (General) Rules.

“The VAT Act empowers ZRA to charge VAT on electronic services supplied to a recipient in Zambia. The Act provides that a non-resident person is considered to have made a taxable supply in Zambia, where electronic services are supplied to any person resident in Zambia,” he said.

Mr Banda explained that non-resident suppliers in this framework were required to register for VAT if the statutory turnover threshold of over K800, 000 per annum was met.

Further, he noted, those that met the threshold for voluntary VAT registration may choose to do so.

Under the requirements, non-resident providers of electronic services to non-taxable (non-VAT registered) persons in Zambia were required to account for VAT and submit a VAT return on or before the 25th day of the month following the month in which the service was provided. According to Mr Banda, ZRA had simplified the registration for suppliers of cross-border electronic services and given a later due date for returns and payments.

He recalled that ZRA started engaging most of the non-resident service providers in 2023.

“Taxpayers are expected to ensure that they register for VAT, file monthly returns and make payments on time. It is also important for taxpayers to avail their Taxpayer Identification Number (TPIN) to the person receiving the services. Tax invoices will also have to be provided in the Zambian Kwacha.

“The obligation as a buyer and consumer of these cross-border electronic services include collecting a receipt, ensuring tax is charged on the receipt, the seller providing their TPIN to the suppliers in cases of business-to-business transactions and ensuring that the business name and TPIN are correctly captured on the invoice to enable the taxpayer claim the input tax,” Mr Banda said.