Regulatory updates - Zambia

As previously mentioned, electronic invoicing was mandated to start on 1 July 2024, but the ZRA has postponed penalties for non-compliance, allowing businesses more time to comply.

The Smart Invoice System launched on 19 March 2024, aims to streamline VAT refunds and enhance revenue administration by reducing tax leaks. During the grace period, taxpayers must register and consistently use the Smart Invoice System, whether they opt for desktop or online solutions.

ZRA emphasized that penalties for non-compliance will be enforced starting 1 October  2024.

A press briefing on the Smart Invoice System will be held on 8 July 2024, at 14:00 in Lusaka, broadcast live on ZNBC TV1 and the ZRA Facebook page, to provide further updates.

The notice specifies a deadline of 1 July 2024 for all taxpayers to adopt mandatory electronic invoicing using the Smart Invoice system. This initiative, outlined in the 2024 Budget and still pending approval from the National Assembly, aims to combat fraudulent input invoices and limit VAT reimbursements to registered businesses.

The forthcoming Smart Invoice system will replace the formerly obligatory Electronic Fiscal Devices (EFD), with taxpayers becoming eligible to claim input VAT or deductions solely based on invoices generated under the new system.

The essential details concerning the new Smart Invoice requirements are as follows:

Smart invoice desktop and tablet application

• Installed on Windows-based devices;
• Allows local creation and management of transactions;
• Suitable for all taxpayers, excluding those with accounting packages;
• Compatible with Small, Medium, and Large taxpayers on Windows 10 or higher.

Smart invoice mobile application

• Installed on Android-based mobile devices;
• Suitable for Turnover Tax taxpayers (not VAT registered);
• Requires Android 8 or higher.

Online smart invoice

• Accessed through a web browser or online portal;
• Particularly suitable for service industry taxpayers issuing few invoices.

Certified invoicing systems

• Integrated with Smart Invoice after certification;
• Suitable for taxpayers with Accounting Packages or ERP Systems;
• Integration through the Virtual Sales Data Controller (VSDC).

To initiate the integration process, taxpayers can download the integration document here and contact [email protected].

The national e-invoicing system will enable the Zambia Revenue Authority to have real-time access to business transactions and monitor them.

The creation of this system is intended to prevent the use of fake invoices in VAT refund claims and ensure that only qualified entities can claim deductions.

Finally, Zambia likely aims to collect more revenue from non-established suppliers, suggesting that they will also be in the scope of the planned e-invoicing system.

More information about the budget plan 2024 is available here.