Update: Musokotwane's K284.8 billion 2027 Budget raises VAT to 16.5% and adds a 39.5% tax band for high earners

Update: Earlier coverage reported the Budget's 4.9% growth target. New since then: the full spending and financing figures, and the tax changes that take effect on 1 January 2027. Finance and National Planning Minister Situmbeko Musokotwane presented a record K284.8 billion national budget for 2027 to Parliament on Friday 6 November. To raise money, the Government will increase Value Added Tax, add a new top income tax band and start taxing dividends paid by mining companies. Total spending is up from K253.1 billion in 2026 and equals 28.4 per cent of the country's output. Domestic revenue is expected to pay for K233.7 billion, or 82.1 per cent of the budget. Grants should add K9.2 billion, and K41.9 billion, or 14.7 per cent, will come from borrowing at home and abroad. The new tax measures are expected to bring in K10.8 billion. Mr Musokotwane said the Government's approach is to "strengthen fiscal sustainability through improved domestic resource mobilisation." ## What changes on 1 January 2027 VAT goes up from 16 per cent to 16.5 per cent. A new Pay As You Earn (PAYE) band of 39.5 per cent applies to monthly earnings above K37,000. Mining companies will pay 15 per cent withholding tax on dividends, up from nothing, and a new 5 per cent export duty applies to zinc concentrates. The royalty on gold that small-scale miners sell to approved buyers drops from 6 per cent to 3 per cent. Import duties rise on ceramic tiles, some aluminium products and processed meat to protect local producers, while customs duty and VAT are suspended on imported raw materials used to make sanitary products. ## Background The budget carries the theme "Grow Zambia: From Stabilisation to Unlocking Opportunities, Creating Jobs and Improving Livelihoods for All" and is the first of President Hakainde Hichilema's second term. The deficit for 2026 is expected to come in at 5.9 per cent of GDP against a target of 2.1 per cent, after money went on fuel subsidies and on buying maize from fa