THE Supreme Court of Zambia has ordered food giant Nestlé Zambia to settle a tax bill of close to K14 million owed to the Zambia Revenue Authority (ZRA), bringing to a close a legal battle that has stretched for years.
According to ZRA corporate communications manager Oliver Nzala, the court’s decision, delivered yesterday, came after ZRA appealed a decision of the Tax Appeals Tribunal, which had earlier sided with Nestlé on five out of six grounds of appeal.
“The Six grounds of appeal included allegations of wrongful assessment by the Zambia Revenue Authority and the allegation that ZRA issued its assessment on the basis that Nestlé Zambia could not run at a loss since incorporation,” Nzala stated.
Nzala shared that the company, despite being a household name in Zambia, was reporting losses year after year, from 2010 to 2014 during which the company consistently reported losses.
Therefore ZRA adjusted the company’s profits to K56.6 million and issued a tax assessment of K13.8 million.
Nestlé challenged the assessment before the Tax Appeals Tribunal, arguing that ZRA relied on unreasonable assumptions, wrongly classifying it as a limited-risk distributor, and used international benchmarks that did not reflect Zambia’s economic conditions.
The company also contested the addition of unrealised foreign exchange losses back into its expenses.
Although the Tribunal ruled in Nestlé’s favour on most grounds, ZRA appealed to the Supreme Court, arguing that the Tribunal erred by shifting the burden of proof and failing to apply globally recognised transfer pricing principles.
In delivering judgment, Supreme Court Judge Kajimanga Kabuka Chisanga upheld ZRA’s appeal, stating that the Authority’s arguments were supported by evidence and facts presented at trial.
Nestlé is now required to settle the full tax liability of K13,860,103.
By George Musonda
Kalemba August 21, 2025
