Story by Stanley James, Business Editor
THE Government has moved to clear confusion surrounding the newly introduced 15 percent Digital Services Withholding Tax, stressing that the levy applies strictly to imported digital services and not to imported goods.
The clarification follows widespread public concern after the tax was announced in the 2026 National Budget by Finance, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube.
In the Budget, Professor Ncube introduced the withholding tax to cover payments made to foreign digital service providers such as streaming platforms, satellite internet services and other offshore digital operators that earn revenue from Zimbabwean users without a physical presence in the country.
However, Treasury said the measure had been misinterpreted as extending to goods purchased outside Zimbabwe.
In a statement issued on Wednesday, Professor Ncube said the tax was designed exclusively to address revenue leakages in the rapidly expanding digital economy and does not apply to imported physical goods, which will continue to attract Value Added Tax (VAT) at the point of entry.
“The Ministry of Finance, Economic Development and Investment Promotion wishes to clarify the policy intent, scope and administration of the Digital Services Withholding Tax (DSWT) introduced through Finance Act No. 7 of 2025, with effect from 1 January 2026. The tax does not apply to imported goods, which remain liable to customs duty, VAT and other applicable taxes at the point of importation in terms of existing customs and VAT legislation. Accordingly, the online purchases of goods is not liable to the DSWT. Any reference to “goods” within the digital services framework must be interpreted in the context of electronically supplied or digitally mediated services, consistent with VAT principles,” Minister Mthuli said.
He said the Zimbabwe Revenue Authority (ZIMRA) has since been directed to implement the tax strictly in line with its original intent and to immediately notify banks, mobile money operators and other designated withholding agents to ensure there is no double taxation.
Under the new framework, the 15 percent tax is withheld at the point of payment by financial institutions and other regulated intermediaries before being remitted to ZIMRA.
“Taxpayers who are already accounting for and remitting VAT on imported services in accordance with the VAT Act will not be liable to the DSWT on the same transactions. The measure is not intended to result in double taxation. The Ministry has noted communication suggesting that the tax applies uniformly to all international card transactions irrespective of the underlying supply. This interpretation is inconsistent with the policy or legislative intent. Engagements with financial institutions are ongoing to ensure consistent and correct application, limited to imported services excluding goods,” he added.
Treasury said the measure is part of broader efforts to safeguard Zimbabwe’s taxing rights and promote fairness in the tax system, as payments for offshore digital services have largely escaped both VAT and income tax despite growing rapidly in recent years.
The withholding tax applies to a range of foreign digital services, including e-hailing platform fees, online advertising, digital content and streaming subscriptions, e-commerce services, commissions charged by offshore platforms and satellite-based internet access services.
“The Digital Services Withholding Tax is not restricted to VISA or other international online card payments. It applies to all offshore payments for imported services, irrespective of the payment channel used, where such payments are processed through regulated intermediaries in Zimbabwe. The DSWT is a compliance mechanism designed to safeguard the country’s tax base, promote equity in the tax system, and modernise revenue administration in line with the digitalisation of the economy.”
Professor Ncube said the policy aligns Zimbabwe with international trends, as governments worldwide adjust their tax systems to capture value generated within their jurisdictions by global digital platforms.
