15% TAX ON DIGITAL SERVICES HITS ZIMBAS

The Government has introduced a 15 percent digital services withholding tax on all payments made to offshore online platforms as part of efforts to regulate the fast-growing digital economy.

Finance Minister Professor Mthuli Ncube made the announcement while presenting the 2026 national budget on Thursday. The new tax is expected to affect millions of Zimbabweans who use streaming services, ride-hailing apps, online content platforms and satellite internet services.

Prof Ncube said the tax, which takes effect on 1 January 2026, is intended to promote fairness in the digital marketplace and safeguard the country’s revenue base as more services migrate online.

“Most digital subscription fees, commissions and access charges are currently paid outside Zimbabwe’s borders without attracting Value Added Tax (VAT), giving foreign digital platforms an unfair competitive advantage over local service providers who are fully taxed within Zimbabwe,” he said.

“The digitisation of economies has increased the consumption of online services, most of which are supplied by offshore companies without a physical presence in Zimbabwe. These transactions are occurring outside our tax net, resulting in revenue leakages and inequitable competition with domestic businesses.”

Under the new framework, banks and mobile money operators will be required to withhold the 15 percent tax at the point of payment, ensuring real-time collection and sealing long-standing loopholes that previously made enforcement difficult.

This means that whenever a customer pays for services such as Netflix, Spotify, Amazon Prime, ride-hailing apps, digital content subscriptions or Starlink satellite internet, the withholding tax will automatically be deducted before the payment is sent offshore.

Prof Ncube noted that similar measures have become standard in many jurisdictions as countries adapt their tax systems to digital commerce, adding that the policy is expected to broaden revenue sources while creating a level playing field for local companies competing with multinational tech giants.

However, the announcement sparked backlash, with some citizens expressing their frustration on social media.

Users argued that some platforms, such as Starlink and InDrive, already include VAT in their charges, raising concerns about potential double taxation. Others warned that the measure may push citizens to obtain foreign visa cards to make payments and bypass the new tax. CITE

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