Public Benefit Organisations in Zambia: Structuring for Impact, Sustainability and Compliance

A properly structured Public Benefit Organisation can enhance organisational credibility, support access to available incentives and provide a framework for sustainable operations.

What is a Public Benefit Organisation (PBO)?

A Public Benefit Organisation (PBO) is an organisation established to undertake activities that benefit the public or a section of the public, rather than generate profits for private individuals.

Under the Income Tax Act, Chapter 323 of the Laws of Zambia, entities that may qualify for approval as PBOs include companies limited by guarantee, trusts, associations, educational institutions, health institutions, sporting associations and other organisations established under Zambian law, provided they meet the prescribed public benefit requirements.

Why PBOs Matter:

PBOs are essential partners in national development. They support communities, advance education and healthcare, promote social welfare, and contribute to addressing some of society’s most pressing challenges.

Why Register a PBOs

In recognising the value of their contribution, the government provides certain tax incentives to eligible PBOs. These incentives are designed to strengthen the financial capacity of such organisations by reducing their tax burden, enabling them to dedicate more resources towards achieving their public benefit objectives and expanding their impact within the communities they serve.

Who Needs to Register?

Any non-profit organisation that carries out public benefit activities and wishes to be recognised as a PBO for tax purposes must first be legally established under the applicable enabling legislation and thereafter obtain approval as a PBO under the Income Tax Act, Cap. 323. Approval grants access to the tax benefits and obligations associated with PBO status.

Regulatory Framework

PBO status in Zambia is primarily governed by the Income Tax Act, Cap. 323, which provides the legal framework for the approval of PBOs and the tax exemptions available to qualifying organisations. A PBO is not a separate legal form of organisation but a tax status that may be granted to an entity established under another law. Accordingly, organisations seeking PBO approval are commonly incorporated under the Companies Act No. 10 of 2017 as companies limited by guarantee, registered under the Societies Act, Cap. 119, or established under the Non-Governmental Organisations Act No. 16 of 2009, depending on their nature and objectives. In addition, qualifying organisations may benefit from customs and excise relief under the Customs and Excise Act, Cap. 322, where the relevant statutory conditions are satisfied.

Legal Benefits of Public Benefit Organisations (PBOs)

A PBO is a non-profit entity established to advance public interest rather than generate profits for private individuals. Examples include charities, foundations, faith-based organisations, community-based organisations and certain non-governmental organisations (NGOs).

Subject to approval under the Income Tax Act and ongoing compliance with applicable legal and regulatory requirements, a PBO may enjoy several benefits, including:

Tax exemptions

An approved PBO may qualify for exemption from income tax on funds applied to approved public benefit activities, such as education, healthcare, poverty alleviation, religion and community development. However, income derived from business or commercial activities may remain subject to tax.

Greater resources for public benefit

By reducing its tax liability, a PBO can allocate a greater proportion of its resources to delivering programmes and services that advance its public benefit objectives.

Tax incentives for donors

Donors who contribute to qualifying PBOs may be eligible for tax benefits, where provided for under applicable tax legislation. These incentives encourage philanthropic giving and support the sustainability of organisations undertaking public benefit activities.

VAT and customs relief

Subject to statutory requirements and approval by the relevant authorities, approved PBOs may qualify for relief from VAT or customs duties on specified goods and materials used in carrying out their public benefit activities.

Enhanced credibility and public confidence

Official recognition as a PBO demonstrates that an organisation operates for the public benefit and meets prescribed legal and governance standards. This enhances its credibility with beneficiaries, government institutions, development partners, and the public.

Improved access to funding

Many local and international donors require organisations to be legally registered and, where applicable, approved as PBOs before they are eligible to receive grants or other forms of financial support. PBO approval can therefore enhance an organisation’s ability to access funding opportunities and support the delivery of its public benefit objectives.

Application Process

Applications for Public Benefit Organisation (PBO) status are submitted through the Zambia Revenue Authority (ZRA) online portal and are assessed by the ZRA and the Ministry of Finance and National Planning to determine whether the applicant meets the statutory requirements for approval.

The process typically takes at least three months. Where the Commissioner-General is satisfied that the requirements have been met, a recommendation for approval is submitted to the Minister of Finance and National Planning. Applications that do not meet the requirements may be recommended for rejection. No application fees are payable for PBO approval.

Professional Assistance with Public Benefit Organisation Registration

Corpus Globe Corporate Solutions Limited (CGCSo) provides expert support throughout the PBO registration process, assisting organisations to navigate the requirements and ensuring seamless application experience.

Contact Us:

Phone: +260 211 296011 / 12 / 13 | +260 960 628385 | +260 770 628385 | +260 953 083688

Email: cgcso@cgcso.co.zm