Local Government (Amendment) Act, 2014 (No. 12 of 2014)

1. This Act may be cited as the Local Government (Amendment) Short title Act, 2014, and shall be read as one with the Local Government Cap. 281 Act, in this Act referred to as the principal Act.

2. Section two of the principal Act is amended by the insertion Amendment of section 2 in the appropriate places of the following new definitions: “ Fund ” means the Local Government Equalisation Fund established under section forty-five A; and “ income tax ” means all taxes payable on the income of persons in the Republic pursuant to the Income Tax Act. Cap 323

3. Section forty-five of the principal Act is amended by the Amendment of section deletion of sub section (3). 45

4. The principal Act is amended by the insertion, immediately Insertion of new section after section forty-five, of the following new section: 45A

45A. (1) There is established the Local Government Establishment of Local Equalisation Fund to which each year Parliament shall Government appropriate not less than five percent of the total amount Equalisation Fund projected to be collected as income taxes for the Republic for that financial year. (2) The purpose of the Fund is to disburse funds to councils to supplement the financing of councils for the performance of their functions listed in the Second Schedule. Single copies of this Act may be obtained from the Government Printer, P.O. Box 30136, 10101 Lusaka, Price K2.00 each. 84 No. 12 of 2014] Local Government (Amendment) (3) The Fund shall be vested in the Minister responsible for finance and shall be administered by the Minister responsible for local government. (4) Notwithstanding sub section (3), the Minister responsible for local government shall disburse funds from the Fund to councils using a formula based on the population residing within the jurisdiction of each council, adjusted by poverty levels to ensure an equitable allocation of funds across councils. (5) A council shall use at least twenty percent of the funds received by the council from the Fund, in any financial year, to finance capital expenditure. (6) The Minister responsible for local government may, in a financial year, make the receipt of part or all of the funds to be disbursed from the Fund to a council conditional upon the council observing sound financial management practices in the council and the delivery of a prescribed minimum level of service. (7) Any balance in the Fund at the close of each financial year shall be retained by the Fund and any deficiency realised in any year shall, subject to the approval of the Minister responsible for finance, be offset against the realised surplus. (8) The Minister responsible for finance may, by statutory instrument, in consultation with the Minister responsible for local government, make regulations for the administration and management of the Fund. (9) The Minister responsible for local government shall cause an annual report to be prepared on the operations of the Fund and laid before the appropriate committee of the National Assembly. (10) Notwithstanding the establishment of the Fund, the Minister responsible for finance may, in consultation with the Minister responsible for Local Government, make specific grants to councils for additional functions that may be devolved to the councils.