FORM VERSE SUBSTANCE: RECHARACTERISATION OF FINANCING AGREEMENTS

28 September 2022

Over the years, there has been a growing stance in the money lending sphere in which the loan agreements are drafted in a way that passes off as an ultimate sale of the collateral granted by a borrower. Typically, the question that arises when there is a dispute between the parties is whether the transaction is one which creates an absolute interest (e.g. by way of sale) or one which is less than absolute (e.g. a security interest). In this article, we explore the distinction between the form and substance in the characterisation of finance agreements.

Zambian Mining Sector Reforms

6 September 2022

Based on an article appearing in the Daily Mail Newspaper of 31 August 2022, the Government of the Republic of Zambia plans to set up a mining commission to improve compliance levels (currently at 10%) of mineral royalty paid by mining firms. Further, this development is part of the imminent mining sector reforms to be undertaken by the Zambian Government.

THE TAX APPEALS TRIBUNAL RULES 2022

Authors: Martha Siwale Namwila-Mwala and John Chulu   22 August 2022   Introduction On 3rd June 2022, the Chief Justice of the Republic of Zambia, Honourable Dr. Justice Mumba Malila S.C prescribed the Tax Appeals Tribunal Rules, Statutory Instrument No. 37 of 2022 (the “TAT 2022 Rules”). Notably, the Rules were passed pursuant to Section 18 of the Tax Appeals Tribunal Act No. 1 of 2015 (the “Act”) which empowers the Chief Justice to prescribe subsidiary legislation through statutory instruments. Background Prior to 2015, the Revenue Appeals Tribunal Act of 1998 (the “Repealed Act”) provided the governing law of what was then known...

Lexology GTDT Merger Control 2023 – Zambia

Contributors: Sydney Chisenga and Mwinji Nachinga   18 August 2022   Introduction This guide provides guidance on merger control system in Zambia with respect to the legislation controlling mergers, notification and clearance timetables, thresholds, triggers and approvals.   [embeddoc url="https://corpus.co.zm/wp-content/uploads/2022/08/2023-Merger-Control-Zambia.pdf" download="all"] ...

Credit Referencing: The permutations of the Court of Appeal Decision in the case of Melissa Supermarket and Another vs. Stanbic Bank Zambia Limited [2022] ZMCA 17 (the “Melissa Decision”)

Authors: Lupiya Simusokwe, Sankananji Mubanga and Salifyanji Simwanza 09 June 2022   Introduction Over the years, varied sentiment has arisen over the establishment and use of credit reference bureaus in Zambia. To one judge, credit reference bureaus represent hidden powers that would be gathering “black information” on individuals and business houses to assist banks and lending institutions to make decisions on whether to lend money. Nonetheless, to some, it is a tool used to determine the credit behaviour of individuals and entities since as they say, “the best predictor of future behaviour is past behaviour”. So then, what is Credit Referencing? Credit referencing is a process...

Rental Income Tax

Authors: Jacqueline Jhala, Namakuzu Shandavu and Francis Muzimu 08 February 2022   Introduction Following the Minister of Finance pronouncements in his 2021 budget speech, effective 1 January 2022, rental income now falls under the turnover tax regime with the obligation to pay the tax now borne by the landlord and not the tenant unless the tenant has been appointed by the Commissioner-General as a withholding agent. The effect of this tax regime is that it abolishes the payment of withholding tax by tenants for premises that they rent. This article addresses the legal implications the new regime will have on lease agreements that currently...

2022 National Budget opinion piece – TAX INCENTIVES WILL BOOST FOREIGN DIRECT INVESTMENT

10 November 2021 The outbreak of the Coronavirus disease 2019 (Covid-19) was a global public health crisis, that hit the Zambian economy and the world economy hard. We believe that the reintroduction of tax incentives will encourage investment and give investors the necessary relief they need to recover from the disastrous impact of Covid-19. To note further that the Government in its quest to foster entrepreneurship and ensure that Zambian citizens are at the forefront in driving industrialization has reduced the investment threshold for a Zambian citizen operating in the MFEZ and industrial park to USD 50 000.00. Further, the Minister of Finance announced...

2022 National Budget opinion piece – Mining, Energy and Infrastructure

05 November 2021 “We anticipate that the new Government, following the regime change, will introduce or enhance policy around the following key sectors which are areas of interest for us and our clients: 1. mining - pro investor tax regime and policy framework to unlock prospective investments to target an increase of copper production from about 2,000,000mt to 3,000,000mt and some of these are already reflected in the proposed 2022 budget which removes the thorny issue of non-deductibility of mineral royalty tax against corporate tax; 2. energy – is expected to introduce fundamental reforms that will restructure the fuel supply chain and promote an energy...