Lusaka, September 12, 2017 – As part of its 2018 National Budget Recommendations, the Zambia Institute of Chartered Accountants (ZICA) is calling on the Ministry of Finance to consider granting tax relief to Zambian employees through reduction in Pay As You Earn (PAYE) tax rates and widening the tax bands for purposes of taxing income for salaried workers.

The accountancy body has observed that Zambia’s salaried employees are presently the highest taxed persons in comparison to other countries in the region. Statistics also show that Zambian workers have been the highest contributor to the national treasury averaging at about 25% of the total tax revenue in the last three years compared to 7% contribution by corporate entities in income taxes.

A comparison of effective PAYE rates among African countries shows that Zambia ranks highly at 34% for Annual income of $50,000. The Institute further established that an individual employee with a monthly salary of US$3,000 would bear a PAYE tax burden of close to $1,000 in Zambia whereas their counterparts in Kenya will pay around $420, close to $340 in Ghana and around $575 in Botswana.

These statistics, reveal the fact that the current PAYE system creates a disconnect with the economic objective of empowering this category of citizens as their disposable income is adversely affected. The current PAYE regime also negates the Seventh National Development Plan theme of “Accelerating development efforts towards the Vision 2030 without leaving anyone behind

ZICA notes that the key deliverable of poverty and vulnerability reduction as well as reduced developmental inequalities may not be achieved if workers are continuously subjected to high taxes.

“There is need for a tax system that grants relief to this category of tax payers while at same allowing the wealthy to pay a little more, therefore we propose a reduction of the top tier PAYE tax rate from 37.5% to 35%. We are also proposing widening of lower tax bands to reduce the crushing tax burden on workers.  The PAYE tax brackets have not been reviewed in a long time thereby placing a strain on individuals on payroll,” says ZICA’s Technical and Standards manager Bruce Mwewa.

He explains that reducing the top tier PAYE tax rate and widening of PAYE tax brackets would give reprieve to salaried taxpayers who are already subjected to other tax obligations in form VAT on consumption and withholding tax for those in rented housing. This would further lead to increased savings, thus stimulating economic activities.

Mwewa believes that the tax relief will create a strong middle class which is a prerequisite for economic growth. With sufficient disposable income, the middle-class consumers would generate the necessary demand for goods and services produced by the economy. In this regard, the institute holds the view that the middle-class consumer creates the business opportunities to spur investment.

ZICA further observes that the amount of allowable monthly pension deduction has been static at K255 for a number of years, hence its value has been eroded by inflation. The Institute therefore appeals to government to consider pegging this amount to the maximum ceiling for NAPSA contributions.

“Increasing the pension thresholds would mobilize savings for infrastructure development and ensure that the ageing population would have sufficient funds at retirement,” avers Mwewa, adding that government needs to consider an enabling environment that allows this category of salaried taxpayers to get some relief on tax from mortgage interest as this relief would encourage uptake for home ownership.

The National Treasury, through the office of the Minister of Finance is expected to present the 2018 Budget to Parliament on September 29.


Quick facts and notes for Editors

A comparison of effective PAYE rates across Africa shows that Zambia ranks highly at 34% for Annual income of $50,000

Member state Annual income of   $1,200 Annual income of $10,000 Annual income of $50,000
Angola 0% 9% 15%
Botswana 0% 12.5% 25%
Republic of Congo 0.7% 15% 24%
Ghana 3% 16% 23%
Kenya 0% 22% 28%
Malawi 30% 30% 30%
Mauritius* 15% 15% 15%
Mozambique 0% 13% 27%
Nigeria 2% 12% 18%
South Africa 0% 18% 30%
Swaziland 0% 25% 33%
Tanzania 2% 24% 29%
Uganda 4% 27% 33%
Zambia 0% 18% 34%
Zimbabwe 0% 13% 24%


Bench marking with other countries

  Zambia PAYE Regime Rate
Income Band
$0 – $367.00 0%
$367.01 – $456 25%
$456.01 – $689 30%
Above $689 37.5%
  Kenya PAYE Regime Rate
Income Band
$0 – 1,207 10%
$1,208 – 2,345 15%
$2,346 – 3,483 20%
$3,484 – 4,620 25%
$4,621 and above 30%
Ghana PAYE Regime
$0-412 0%
$413 – $618 5%
$619 – $905 10%
$906 – 8,237 18%
$8,237 and above 25%
Nigeria PAYE Regime Rate
$0-1,500 7%
$1,501 – $3,000 11%
$3,001 – $5,500 15%
$5,501 – $8,000 19%
$8,001 – $16,000 21%
$16,000 and above 24%
South Africa PAYE Regime Rate
$ 0- 11,824 18%
$11,824– $18,467 26%
$18,468 – $25,558 31%
$25,559– $35,757 36%
$35,758 –  45,585 39%
$45,585 and above 41%


As seen from the effective PAYE rates across Africa and the benchmarking with other PAYE regimes in other countries, Zambian employees are the highest taxed.


King Syacika
Media & Communications Officer
Tel: +260 211 374550-9
Jessica Chisompola
Head: Communication & Business Development
Tel: +260 211 374550-9



The Zambia Institute of Chartered Accountants (ZICA) was established by an Act of Parliament in 1982 and repealed in 2008. The Zambia Institute of Chartered Accountants is a membership body regulating the Accountancy profession in Zambia.

Regulation of the Accountancy Profession

The Institute registers all practicing accountants in Zambia as required by the Act. According to the Accountants Act of 2008, an accountant means a person qualified in the theory and practice of accountancy, auditor, tax consultant and tax advisor and registered under this Act. A person may however have read the theory and practice of accountancy but if such a person is not registered as provided for in the Accountants Act of 2008, such a person is not an accountant in the eyes of the law. The Institute further regulates and governs the conduct of its members in the practice of their business and profession. It further maintains appropriate practice standards that are consistent with the principle of self-regulation and protection of public interest among members.

Regulation of Education of the Accountant

The Institute is mandated by law to register all accountancy students in Zambia and regulate standards of training and practice, including the holding of examinations necessary to qualify applicants for membership of the Institute. The Act also gives power to the Institute to develop, promote, maintain and improve appropriate standards of qualification in the accountancy profession.

For more information