In a notable move, the government has introduced a Statutory Instrument (S.I.) Number 25 of 2024, which effectively raises the value of a fee and penalty unit to forty ngwee. This new regulation came into force on 19 April 2024, marking a significant adjustment from the previous value of thirty ngwee.

Typically outlined in various statutes and regulations, a fee or penalty unit determines the amounts payable to Zambian government ministries. With this recent change, these units’ Kwacha (ZMW) value has increased, consequently raising the cost of fines and statutory fees across the board.

The rationale behind utilizing penalty and fee units in legislation is to circumvent the need for frequent amendments to account for changes in monetary value. It is far more efficient to adjust the unit value than to repeatedly alter the legislation.

Impact

The ten ngwee increase doesn’t translate to a simple ten ngwee hike in fees and fines across government institutions. In reality, fees have surged by 33.3%. Key institutions such as the Courts of Zambia, the Patent and Company Registration Agency (PACRA), the Immigration Department, and the Road Transport and Safety Agency (RTSA) have all adjusted their fees upwards in response to this change.

This adjustment is expected to have significant repercussions for various stakeholders:

• Small and Medium-Sized Enterprises (SMEs): These businesses may find it challenging to accommodate the increased statutory fees charged by various institutions.
• Individuals: Citizens will face higher fines and other penalties.
• Foreign Investors: The increase may affect their cost calculations and investment decisions.

Conclusion

Statutory Instrument Number 25 of 2024 represents a pivotal change in the financial landscape, promising increased revenue for government institutions. While this regulation poses certain challenges, it also brings opportunities for growth and improvement of the economy. Understanding its provisions and implications is crucial for all stakeholders to ensure compliance and make well-informed decisions.

For any questions or further information, please reach out to our team at zambia@bellmacconsulting.com.