Excise is a tax levied on specific goods and services that are considered to be either luxuries and are predominantly consumed by the high-income groups or are goods and services that are associated with externalities. Externalities are consequence of individual consumption, industrial or commercial activity which affects other parties without this being reflected in market prices, such as the health problems caused on others by smokers, pollution of surrounding by industrial emisions, accidents caused by drunk drivers etc.
Apart from the objective of mobilizing revenue for government, Excise taxes on goods and services are imposed for two other reasons these are:
- For luxury goods and services that are predominantly consumed by the high income gorups, to add progressivity the tax system; and
- For goods that are associated with externalities, to internalize their cost third parties.
Depending on the objective of the policy, Excise may be charged at different levels of production, i.e. at intermediary or retail level.
There are two methods of charging Excise.
- Specific rates, based on quantity
- Ad valorem rates, based on value
Excise in Zambia is imposed on the supply of:
- Any portable liquid containing more than two per centum of alcohol by volume
- All types of spirits and wines
- Opaque beer in containers exceeding twenty-three decalitre
- Cigarettes, cigarette tobacco, pipe tobacco, cigar and sniff
- Electrical energy
- Plastic Carrier bags
- Hydrocarbon oils such petrol, diesel Fuel oils and gases
Manufacturers of or distributors of these products must apply for excise licenses and Excise registration to ZRA. Excise licenses are renewable every year. Tax payers must therefore apply for on or before 30th September.
The following are the excise taxes that are imposed on goods and services in Zambia. With applicable rates.
|1.||Clear Beer||Malted Barley||40%|
|2.||Opaque beer||K0.15 or 15 ngwee per liter|
|3.||All type of wines||60%|
|4.||Spirits, liqueurs’ and other spirituous beverages||60%|
|5.||Cigars, cheroots, cigarillos and cigarettes of tobacco substitutes||K240.00 per 1,000 sticks for importers and K60 per 1,000 sticks for local manufacturers|
|6.||Other manufactured tobacco substitutes
“homogenized” or reconstituted tobacco extracts and essences.
|K240.00 per 1,000 sticks for Importers or distributor
and K60 per 1,000 sticks for local manufacturers
|7.||Hydrocarbon Oils:||Petroleum spirit (petrol)||K11.43 Excise Duty per decalitre; K 8.27 Fuel Levy per
|Other light oils||15%|
|Low Sulphur gas oil||K6.20 Fuel Levy per decalitre|
|Automotive gas -oils
|K6.20 Fuel Levy per decalitre|
|Fuel oils –Heavy Fuel
|K8.70 per 10 kg|
and other gaseous
|SMS and MMS||17.5|
|Beauty make-up kits, body and hair and perfumes||20%|
The accounting period for Excise is a calendar month and the return and payment due date is the 15th and 20th day pf the month following the accounting period.