Zambia proposes ending the VAT zero rate on energy-saving appliances from 1 January 2027 (2027 Budget, not yet law)

What changed in detail

This is a budget proposal, not law. In the 2027 Budget Address delivered to the National Assembly on 6 November 2026, Zambia’s Minister of Finance and National Planning proposed, among measures to broaden the tax base, to discontinue the exemption of customs duty and Value Added Tax zero-rating on energy saving appliances (paragraph 115(b)).

The budget’s annex of tax measures, under the rationalisation of current tax incentives, lists two separate items:

• item 15: discontinue the exemption of customs duty on energy saving appliances (Statutory Instrument No. 102 of 2021);
• item 16: discontinue the VAT zero-rating on energy saving appliances (Statutory Instrument No. 86 of 2022).

The address states that the revenue measures proposed would come into effect on 1 January 2027 (paragraph 122). Removing the zero rating requires amending legislation; until then the zero rating under Statutory Instrument No. 86 of 2022 continues to apply.

What it means

If enacted, energy-saving appliances would move from 0% to the standard VAT rate, which the same budget proposes to raise to 16.5%, and would also attract customs duty at import. For importers that is a double cost increase on the same goods from the same date. Suppliers should identify which product lines currently rely on the zero rating, and plan price and system changes for 1 January 2027, switching only once the amending instrument is in force.