(a) Domicile Status of Kim and His Family

Domicile is a legal concept that refers to the country where a person has their permanent home.
In Zambia, domicile status affects an individual's tax liabilities.

• Kim: Kim is likely to be considered domiciled in Zambia because he returned to Zambia

with his family and took up permanent employment there as of 1st January 2024. His
actions indicate an intention to reside in Zambia permanently.
• Mary: As Kim's spouse and given that she moved back to Zambia with him, Mary will
also be considered domiciled in Zambia.
• Humphrey, Sara, Patrick, and Gilton: The children’s domicile generally follows that
of their parents. Since Kim and Mary are domiciled in Zambia, their children will also be
considered domiciled in Zambia.

(b) Calculation of Income Tax Payable by Kim for the Tax Year 2024
Income Source Amount (K)
Employment Income
- Annual salary 180,000.0
- General-purpose allowance (2,700/month) 32,400
- Housing allowance (3,500/month) 42,000
- Education allowance (1,600/month) 19,200
- Medical allowance (per annum) 9,000.0
Total Employment Income 282,600.0
Dividends from Botswana (Gross) 24,000.0
Rental Income from Botswana 40,000.0
Dividends from Zambia 85,000.0
Bank Interest from Botswana (Gross) 15,000.0
Royalties from Book 25,500.0
Total Gross Income 472,100.0

Tax Band Income Amount (K) Tax Rate (%) Tax Amount (K)
0% on income up to K54,000 54,000.00 0% 0
25% on income between K54,001 and K69,600 15,600.00 25% 3,900
30% on income between K69,601 and K97,200 27,600.00 30% 8,280
37.5% on income above K97,200 374,900.00 37.50% 140,587.50
Total Zambian Tax Payable 152,767.50
PAYE Deducted 45,800
Net Tax Payable Before Credits 106,967.50
Botswana Dividends Tax Credit 9,120
Botswana Bank Interest Tax Credit 3,000
Net Income Tax Payable 94,847.50
(c) Treaty Relief vs. Unilateral Credit Relief

1. Treaty Relief

Tax relief is provided under a tax treaty (double tax agreement) between two countries to avoid
double taxation. Taxpayers are allowed to reduce their home country's tax liability by the amount
of tax paid in the foreign country. Only applicable if there is a tax treaty between the two countries.

2. Unilateral Credit Relief:

Tax relief is granted by a country on its own accord, without the necessity of a treaty, to relieve
the burden of double taxation on its residents. The home country provides a tax credit for taxes
paid to a foreign country on income that is also taxable in the home country. Used when there is
no tax treaty between the countries.