The Ministry of Finance, Economic Development and Investment Promotion has issued a clarification on the implementation of the digital services withholding tax on imported services, effective immediately. This move aims to correct an error in Clause 44 of Finance Act 7 of 2025, which incorrectly stated that the tax would apply to payments made for goods and services supplied from outside Zimbabwe.
Zimbabwe, in its 2026 National Budget introduced a 15% new tax on payments made to increasingly popular international digital service providers. The tax took effect on January 1, 2026.
According to the Ministry, the digital services withholding tax applies specifically to imported services, whereas Value Added Tax (VAT) on imported goods will be chargeable at the time of importation. The Zimbabwe Revenue Authority (ZIMRA) has been directed to implement the tax in line with the policy intention, ensuring consistency and clarity.
To avoid double taxation of goods, ZIMRA has been instructed to notify all withholding tax agents, including financial institutions, of the revised development. The error is currently pending rectification by the Attorney General’s Office.
This clarification provides much-needed clarity on the tax implementation, ensuring a smoother process for businesses and individuals alike. The Ministry’s prompt action demonstrates its commitment to transparency and effective tax administration.
