The minimum chargeable (taxable) income in Zambia is at K3,305. Meaning, if you earn any income BELOW or LESS THAN K3,305 the tax due to ZRA is ZERO PERCENT (0.00%). Now my concern is this: How come ZRA decided to put a “blanket” percentage of 10% on rentals (withholding tax) without taking into consideration how it is affected by the minimum chargeable income?
For example, if me as a retiree decide to put my house on rent at a monthly rental charge of K2,500/month; and this is my only income, why should ZRA be asking me, through my tenant to deduct 10% (withholding tax) from my earning which is way below the taxable income? Isn’t this selective application of the Pay A You Earn (PAYE) tax? Would I be wrong therefore, to assume that if I ‘am letting out my property at say K3,300/month then I owe ZRA nothing? Because an income of K3,300 attracts a 0.00% tax charge. IT IS NOT TAXABLE!
What really do the technocrats at ZRA discuss when coming up with such taxes? Not only is this tax contradictory to the minimum chargeable income policy but it also exposes the lack of thinking at ZRA.
So before that realtor contracted by ZRA begins to do their door to door nonsense, can ZRA rectify this anomaly. Yes, govt needs revenue, but let it not be done as if the brain has ceased functioning!
Rental tax v minimum taxable income