By Dennis Ndlovu I Zim GBC News
Date: 22 January 2026
The Zimbabwe Revenue Authority (ZIMRA) has published a detailed guide on how a new tax on digital services purchased from foreign companies will be collected.
This follows legislative changes to the Value Added Tax Act that took effect on 1 January 2026.
In Public Notice 05 of 2026, ZIMRA states the tax will be applied through a mandatory withholding mechanism, where local financial institutions must deduct the tax when a payment is made from Zimbabwe to a foreign digital service provider.
The key changes
Prior to the amendment, non-resident suppliers of services like streaming or online subscriptions were required to register for VAT in Zimbabwe themselves if they met a certain threshold.
The amended law introduces a Digital Services Withholding Tax. It retains the same scope of taxable electronic services but shifts the primary collection duty to local “intermediaries” processing the payments.
ZIMRA clarified that the tax does not apply to the buying and selling of physical goods, which remain subject to existing customs and VAT procedures at ports of entry.
What is taxed and how
The tax targets electronic services supplied by non-resident companies for consumption within Zimbabwe. This includes a wide range of digital offerings.
Examples listed by ZIMRA include streaming services, cloud computing, online advertising, downloadable apps and e-books, subscription media, and platform-based services like ride-hailing apps.
For VAT, the collection method depends on how the service is supplied and paid for.
Where a service is not supplied electronically, the Zimbabwean recipient must self-account for the VAT. Where it is supplied electronically, the foreign supplier is deemed to be making a supply in Zimbabwe.
To enhance collection, local financial institutions are now required to withhold the tax when processing payments to these foreign suppliers.
Role of financial intermediaries
The notice defines intermediaries broadly, including banks, building societies, mobile money platforms, microfinance institutions, and licensed money transfer services.
These intermediaries are obligated to withhold the tax at the point of payment and remit it to ZIMRA.
The withholding rate is set at 15.5% of the payment if the foreign supplier is not VAT-registered in Zimbabwe, or at the tax fraction of 3/23 if the supplier is registered.
They must also issue a withholding certificate to the consumer and maintain detailed records for ZIMRA verification.
Obligations for foreign suppliers
Non-resident suppliers whose turnover exceeds or is expected to exceed $25,000 in a year must register for VAT in Zimbabwe via the TaRMS system.
Those already registered under the old system remain registered. They must charge VAT-inclusive prices and file returns, but can claim a credit for any tax already withheld in Zimbabwe on their behalf.
Where a Zimbabwean consumer pays a foreign supplier directly using an overseas platform, the supplier remains fully responsible for accounting for the VAT to ZIMRA.
Exemptions and deadlines
Certain services, such as specified educational, medical, and financial services, remain zero-rated or exempt from the digital services tax.
Intermediaries must file returns and pay withheld tax by the 10th and 15th of the following month, respectively. Non-resident suppliers have the same deadlines for their VAT returns and payments.
The tax itself is payable in United States Dollars. Local VAT-registered businesses can claim input tax on these services using valid tax invoices from the foreign supplier.
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