Zambia 2026 Budget: Key VAT and Customs Changes

October 9, 2025

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The Zambian Minister of Finance presented the 2026 National Budget to Parliament, which contains proposals to amend the Income Tax Act, the Value Added Tax Act, the Customs and Excise Act, and the Mobile Money Transaction Levy Act. Overall, the National Budget and proposed amendments aim to further develop previously adopted measures to consolidate the country's economic situation and strengthen the progress already achieved, while promoting long-term stability and fairness across society.

Summary of Key VAT and Customs Amendments

The 2026 National Budget proposes several key changes to customs, excise, and VAT intended to strengthen domestic industries, promote sustainability, and ensure equitable revenue generation. Notably, the dairy sector is one of the main areas of focus, where a substantial increase in customs duties is proposed to support local producers and reduce reliance on imported dairy products.

Additionally, customs duty on powdered milk should increase significantly, while a uniform surtax on imported milk, cheese, and yoghurt should contribute to more equal conditions for domestic processing. Simultaneously, the removal of import duty on mild pasteurisation machinery and the expansion of the local content allowance for value-added products should be viewed as the government's intention to enhance local production capacity and stimulate the agro-processing industry.

The energy sector is another area of focus for the government, with the Ministry of Finance proposing relief measures to encourage investment in infrastructure and renewable energy projects. These measures include duty exemptions on equipment used for electricity transmission and distribution, as well as an extended VAT refund period for hydroelectricity projects, from seven to ten years.

Conclusion

Essentially, the Minister of Finance proposed a tax reform that reflects Zambia’s strategic approach to balancing industrial growth, environmental responsibility, and social inclusion. By strategically tightening import regulations where necessary and providing VAT and customs relief for key sectors, the proposed amendments aim to create a more resilient and diversified economic landscape, effective January 2026.

Source: 2026 National Budget

What are the main tax laws amended in Zambia’s 2026 National Budget?

The 2026 National Budget proposes amendments to the Income Tax Act, Value Added Tax Act, Customs and Excise Act, and the Mobile Money Transaction Levy Act to strengthen the economy and ensure long-term stability.

How does the 2026 Budget impact Zambia’s dairy industry?

The Budget increases customs duties on powdered milk and introduces a surtax on imported milk, cheese, and yoghurt to support local producers and reduce dependence on imports.

What customs relief measures are proposed for local industries?

The government plans to remove import duty on mild pasteurisation machinery and expand local content allowances for value-added products to stimulate agro-processing and domestic production.

How does the 2026 Budget support the energy sector?

It introduces duty exemptions on equipment for electricity transmission and distribution, and extends the VAT refund period for hydroelectric projects from seven to ten years to promote investment.

When will the proposed tax amendments take effect in Zambia?

The new VAT, customs, and excise changes outlined in the 2026 National Budget are expected to take effect from January 2026.

What is the overall goal of Zambia’s 2026 tax reform?

The reform aims to balance industrial growth, environmental sustainability, and social inclusion by tightening import rules while offering relief for key sectors to build a resilient economy.

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