By Chantelle Muzanenhamo
THE government has instructed the Zimbabwe Revenue Authority (ZIMRA) to halt the application of the 15% Digital Services Withholding Tax on all foreign payments, following a drafting mistake in the 2026 Finance Act.
The tax, which was introduced in Minister Mthuli Ncube’s 2026 National Budget, was designed to apply only to imported digital services, such as Netflix, Starlink, and other offshore online platforms.
Minister Ncube first announced the tax during his budget speech to Parliament on 27 November 2025, stating that it would replace the standard VAT on imported digital services, making collection more efficient and ensuring that online platforms contribute to the country’s revenue.
However, a confidential Treasury letter, dated January 5 2026, revealed that Clause 44 of Finance Act 7 of 2025 was incorrectly drafted, making it appear that the tax should apply to all payments for goods and services from outside Zimbabwe.
Secretary to the Treasury George Guvamatanga wrote to ZIMRA Commissioner General Regina Chinamasa, instructing the authority to implement the tax as originally intended, despite the wording in the law:
“Notwithstanding the above, Treasury notes that Clause 44 of Finance Act 7 of 2025 erroneously states that the Digital Services Withholding Tax will apply ‘whenever payment is made for goods and services that are supplied from outside Zimbabwe’. The tax should, however, be applied on imported services only, while VAT on imported goods will be chargeable at the time a consignment is imported into the country,” read part of the letter.
The Treasury has directed ZIMRA to immediately inform banks and payment platforms to prevent double taxation on physical imports.
The Ministry confirmed that the Office of the Attorney General will formally correct the legislative error.
The 15% Digital Services Withholding Tax is aimed at ensuring that payments made to offshore digital platforms are taxed in Zimbabwe, while physical goods imported into the country continue to be taxed under the standard VAT regime, preserving clarity and preventing unnecessary charges to consumers.