James Thornton – BRITISH High Commissioner to Zambia
By JUDITH NAMUTOWE –
ZAMBIA and the United Kingdom (UK) Government yesterday signed a new agreement for the avoidance of double taxation (DTA) with respect to taxes on income and capital.
The agreement would see businesses and individuals in both countries paying taxes fairly and equitably.
The purpose of the DTA is to promote international trade and investment by ensuring the businesses were not subjected to double taxation of certain types of taxes between the two countries, as that would be detrimental to investment.
Speaking during the signing ceremony in Lusaka yesterday, Acting President and Finance Minister Alexander Chikwanda said the agreement was also aimed at providing enhanced certainty on taxation rights for investors when they engage in bilateral trade and investment activities.
“The new agreement enhances tax administration between our two countries. The agreement now includes anti-abuse provisions so that only beneficial owners of dividends, interest and royalties that are being distributed get the benefits of the DTA,” Mr Chikwanda said.
Mr Chikwanda said over the years, the agreement of 1972 as amended in 1981, had become outdated in many respects and needed to be repealed and replaced by a new one. This was to ensure that mechanisms of avoiding DTA of the same income between the two countries were in line with modern standards.
Meanwhile, the trade volumes between Zambia and UK declined by 4.4 per cent at US$ 104.9 million in the first quarter of 2013 from US$ 109. 8 million recorded during the corresponding quarter in 2012.
Commenting on the decline of the trade volumes between the two countries, Mr Chikwanda said the out turn was driven by a decline in exports of copper cathodes and articles to the UK and imports of industrial boilers.
He said the signing of the agreement would further promote and strengthen the economic relations that existed between the two countries.
British High Commissioner James Thornton said the new agreement contained many improvements that would be of mutual benefit.
