Zambia 2026 Budget: Key VAT and Customs Changes
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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

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