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The Property Transfer Tax Act Chapter 340 of the Laws of Zambia (the PTT Act) is an Act that provides for, among others, the levying of property transfer tax (PTT) in Zambia. On 27 December 2022, Parliament enacted the Property Transfer Tax (Amendment) Act No. 27 of 2022 (the Amendment Act), which amended the PTT Act with effect on 1 January 2023. This legal alert highlights the amendments to the PTT Act brought about by the Amendment Act.
Accordingly, the PTT payable on the transfer of an interest in a mining right or a mineral processing licence is now 5% of the realised value in respect of the said interests.The Amendment Act has also amended section 5(3) of the PTT Act which sets out the mode of computing realised value. The section previously provided for realised value in respect of intellectual property, a mining right or an interest in a mining right to be the actual price of the said property, right or interest or as may be determined by the Commissioner-General.
The section has been amended to delete the reference to an interest in a mining right, with the result being that the realised value of an interest in a mining right or an interest in a mineral processing license cannot be determined by reference to section 5(3) of the PTT Act.
Despite these amendments, the PTT Act has not provided the mode of determination of the realised value of an interest in a mining right of an interest in a mineral processing license. Although section 2A of the PTT Act as amended by the Amendment Act provides for computation in respect of a share, the section specifically refers to a share in a company and not a share as defined in the PTT Act. It is, therefore, unclear how this will be computed going forward.
This legal alert has set out the amendments to the PTT Act brought about by the Amendment Act.
Should you have any questions on this legal alert or need any advice relating to the amendments to the Property Transfer Tax Act, please do not hesitate to reach out to Chanda Musonda.