Securities and Exchange Commission proposes measures to expand green project financing in Zambia

The Securities and Exchange Commission (SEC), in its effort to lead green project financing, has proposed reduction in import taxes which are expected to lower the cost of importing technologies and materials essential for these schemes.

According to SEC, the reduction in import taxes is expected to lower the cost of importing equipment, technologies and materials essential for green projects financed through green bonds.

This is contained in a 2025 national budget submission made by the SEC Analyst/Inspector, Kalima Chaleka, in Lusaka at the consultation meeting organised by the Ministry of Finance and National Planning.

Chaleka noted that the proposed incentive was the reduction in import tax, citing that of agriculture at five percent.

“The cost saving will improve the financial feasibility of investing in sustainable practices such as renewable energy generations, or sustainable agriculture methods for Small and Medium Enterprises (SMEs) and the private sector,” he said.

He also noted that currently expenses attributable to the issuance of securities, including corporate bonds, were considered to be capital in nature and therefore non-deductible for tax purposes.

“The rationale for this proposal is to reduce the net cost (Green bond certifications, legal, advisory, reporting accountant etc) of issuing green bonds and make the capital markets attractive and financially attract more listings,” Chaleka said.

Further, Chaleka submitted the need to make expenses allowable for tax purposes to enhance capacity building across the capital market. “In line with Section 81, payments subject to withholding tax on interest.

“We propose that the, no withholding tax applicable to Individuals from savings or deposits held with financial institutions be extended to dividends earned by Individuals in the capital market,” he said.

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