By Dennis Ndlovu I Zim GBC News
Date: 22 January 2026<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
This follows legislative changes to the Value Added Tax Act that took effect on 1 January 2026.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
For VAT, the collection method depends on how the service is supplied and paid for.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
To enhance collection, local financial institutions are now required to withhold the tax when processing payments to these foreign suppliers.<\/p>\n\n\n\n
Role of financial intermediaries
The notice defines intermediaries broadly, including banks, building societies, mobile money platforms, microfinance institutions, and licensed money transfer services.<\/p>\n\n\n\n
These intermediaries are obligated to withhold the tax at the point of payment and remit it to ZIMRA.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
They must also issue a withholding certificate to the consumer and maintain detailed records for ZIMRA verification.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
Exemptions and deadlines
Certain services, such as specified educational, medical, and financial services, remain zero-rated or exempt from the digital services tax.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
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Zim GBC News | Global News From An African Perspective\u00a92026<\/p>\n","protected":false},"excerpt":{"rendered":"
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