Zambia cuts fuel VAT to 0% to ease price pressure
Zambia has moved to curb rising fuel costs by introducing a 0% VAT rate on petrol and diesel, as part of wider efforts to stabilise inflation and protect household spending. The zero-rating of fuel imports will be in place for three months, and will then be revisited.
Follow our Iran conflict VAT cut tracker to see what other countries are cutting VAT on fuel and basics.
The measure removes VAT from fuel supplies at the pump, immediately reducing end-user prices. Crucially, suppliers should retain the ability to recover input VAT, preserving neutrality across the supply chain and preventing hidden cost accumulation.
It will initially apply between April and June 2026.
Fuel rises on Gulf conflict
According to Zambia’s Finance Minister, the developments have largely been triggered by the ongoing tensions in the Middle East, which have led to increased international fuel prices and mounting pressure on domestic pump prices.
This follows a familiar global pattern. Governments are increasingly turning to temporary VAT relief on energy as a fast-acting fiscal lever during periods of volatility. By targeting fuel, Zambia aims to dampen transport and logistics costs, which quickly feed into broader price levels.
