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Managing Your Taxes as a Zambian Expat: What You Need to Know

13 Dec 2023


A report by Macrotrends said that the number of Zambian migrants was 127,915 in 2010 who reside in several developed countries worldwide to earn a living and send money to Zambia to offer financial support to their families.

Another report by The Global Economy, sourcing its data from the World Bank, said that the Zambian migrants had sent in $241.69 million in inward remittances to Zambia in 2021.

While seeking a job in a foreign land may be easy for you as a Zambian migrant, provided you have the necessary skills, education, and experience. And everything associated with your job in a foreign country is easy to understand and follow. However, one thing is so complicated that despite trying hard enough to understand it fully, you still need a professional’s help in that particular area.

It is related to finance.

And the field is taxation.

Taxation is one of the most complicated areas in finance and the economy. Whether on an individual or a macro level, you must counter taxation in your life if you earn money.

Regardless of what you earn, how much, and where, you will have to come across taxation, whose basic understanding is a must for you.

Since it is impossible to encompass taxation’s every aspect because it is a field left to the expert minds, this blog will focus on defining taxes and the management of taxation in a simple-to-understand manner.

Let’s dive in deeper together!

Why Is Understanding Taxation Important?

Well, for the simple reason that you have to pay tax if you are earning money.

And you usually migrate to a developed country to earn a living. Always remember that almost every developed country is pretty strict about its taxation matters, and in several countries, tax evasion is punishable by penalties and long spells of imprisonment.

Furthermore, since it is a highly technical matter, it offers many chances for unscrupulous elements to deceive you while you pay your taxes. You can either pay your taxes twice or more than you are legally required if you lack basic knowledge about tax matters.

You can fall victim to tax fraud, particularly if you are living abroad to earn a living to support your family back home through a money transfer to Zambia.

Do you want to know which countries pay the most to expatriates who wish to work abroad and earn a handsome income?

Click the link below:

Countries Paying The Most To Expatriates.

Since your remittances undergo taxation, having basic knowledge about tax matters is extremely important.

Let’s understand taxation and its different types.

What Is Taxation?

It is the compulsory imposition of levies by the government on individuals and businesses alike. The primary purpose of the imposition of taxes is to generate revenue for government expenditures due to government departments dispensing their duties to serve the masses.

Types Of Taxes

The following are the main types of taxes. These taxes are imposed in every country in one form or the other.

Income Tax

It is a percentage of the generated income surrendered to the state or the federal government.

Payroll Tax

It is a percentage that the employer withholds on the employee’s behalf and pays to the government to fund the Social Security Program and Medicare.

Corporate Tax

It is the amount the governments charge on corporate profits to fund the government exchequer.

Sales Tax

The governments impose sales tax on goods and services.

Property Tax

It is a percentage that the government deducts as tax proportionate to the value of land and property assets.

Tariff

It is a tax imposed on imported goods to boost and strengthen domestic business.

These are some of the main types of taxes in vogue worldwide.

Before understanding the management of taxes as a Zambian migrant, let’s take a quick look at the Zambian economy to see why its people feel the need to travel abroad to earn a living and support their families back home through an online money transfer to Zambia.

Quick Facts About The Zambian Economy

  • A World Bank report said that in 2021, Zambia's nominal Gross Domestic Product (GDP) was $22.15 billion.
  • The World Bank, in another report, said that the GDP per capita income in Zambia in 2021 was $1,137.3.

Now let’s understand tax management as a Zambian migrant.

Steps To Manage Your Taxation Smartly

Smart tax management is to understand the technicalities of taxation and pay the right amount timely.

The following few steps will help you in ensuring smart tax management.

Increase Retirement Savings Plans

It makes sense to use an employer-sponsored retirement savings plan. Since you contribute to it with your pre-tax amount, it will keep your taxable income and tax rate lowered.

Utilise Employee Benefits

As a team member, several companies offer many employee benefits. These benefits can reduce your taxable income and, in turn, the tax liability that you have to pay as taxes.

Paying The Right Amount

This is one of the reasons why it is asserted that basic knowledge about taxes is necessary. If you do not know exactly what is the tax amount, you will either pay less, which will lead to fines and penalties, or you will pay extra.

Either way, it will be a financial burden for you.

File Taxes Timely

It is important to file your taxes timely, as a delay in filing taxes can lead to fines and penalties. The amount of financial penalty varies from country to country, but your tax bill could increase by 25% in most cases.

Furthermore, continued delay in filing your returns can be considered tax evasion, leading to criminal prosecution.

Following these simple tips can help you manage your finances efficiently.

The Way Forward

You will be charged a low fee and offered live and competitive currency exchange rates. You will get several other benefits that could help you save money and compensate for the amount you pay as taxes while transferring remittances if you choose to send money to Zambia online with ACE Money Transfer.
 

FAQs

Do Zambian expatriates need to file taxes in Zambia while living abroad?

Zambian expatriates are generally not required to file taxes in Zambia if they are non-residents and their income is earned abroad. However, it's essential to understand the tax laws in both Zambia and their host country to ensure compliance.

Are there any tax treaties that may affect the tax liability of Zambian expatriates abroad?

Zambia has signed double taxation treaties with several countries to prevent double taxation on income. Zambian expatriates should be aware of these treaties, as they can impact their tax liability, including potential tax exemptions or credits.

How can Zambian expatriates benefit from tax planning and optimization strategies while living abroad?

Expatriates can optimize their tax situation by taking advantage of tax-efficient investment options, understanding deductions and credits available in their host country, and consulting with tax professionals who specialize in expatriate taxation.

What documentation should Zambian expatriates maintain to facilitate tax compliance and filing?

Expatriates should keep thorough records of their income, expenses, and any relevant tax-related documents, such as W-2 forms, foreign tax statements, and receipts. These records will be valuable when filing taxes both in their host country and, if necessary, in Zambia.

Are there any specific tax responsibilities or considerations for Zambian expatriates returning to Zambia after living abroad?

When returning to Zambia, expatriates should review their financial assets and tax obligations, including any foreign income they may have earned during their time abroad. Seeking guidance from a tax professional can help ensure a smooth transition back to Zambia.

 

  • Zambian migrants

(Zambia Immigration Statistics 1960-2023 | MacroTrends)

  • Zambian remittances

(Zambia Remittances - data, chart | TheGlobalEconomy.com)

  • Zambian GDP

(GDP (current US$) - Zambia | Data (worldbank.org)

  • Zambian GDP per capita

(GDP per capita (current US$) - Zambia | Data (worldbank.org)


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