EXPLAINER: ZIMRA Breaks Down How The New 15% Digital Services Tax Will Be Collected Amid Confusion

ZIMRA Explains How New 15% Digital Services Tax Will Be Collected Amid Confusion

The Zimbabwe Revenue Authority has stepped in to clear the air on a major new tax. Confusion has swirled around a new 15% levy on digital services bought from overseas companies. In a detailed public notice issued on 19 January 2026, ZIMRA explained that this Digital Services Tax is now being collected through a mandatory withholding system, shifting the responsibility to local banks and payment platforms.

This follows legal amendments to the Value Added Tax Act which took full effect on 1 January 2026. The tax authority stated that the change is designed to ensure VAT is captured on cross-border digital transactions that were previously challenging to monitor.

ZIMRA’s Public Notice No. 05 of 2026 states:

“With effect from 1st January 2026, section 13A of the Value Added Tax Act [Chapter 23:12] was amended and substituted. The amended section 13A retains the same scope of electronic services but introduces a Digital Services Withholding Tax mechanism, requiring intermediaries to withhold tax when a consumer in Zimbabwe makes payment to a foreign supplier for digital services.”

What Services Are Covered And Taxed?

The tax applies to a vast array of digital products and services purchased from foreign suppliers. ZIMRA provided an extensive list to eliminate any doubt, clarifying that electronic services are those “supplied or delivered through electronic or telecommunications networks.”

The notice gives explicit examples, which include:

“Online subscriptions and digital platform access; streaming, cloud computing and hosting services; downloadable digital content (apps, e-books, films); subscription-based electronic media (news, magazines, journals); and platform-based transport hailing services.”

The authority confirmed that digital versions of products, like e-books, are treated as services, not goods. Crucially, ZIMRA stressed that the tax does not hit physical items bought online.

“Digital Services Tax does not apply to the buying and selling of physical goods. Physical goods remain subject to VAT on imported goods under section 6(1)(b) of the VAT Act.”

How The Money Will Be Taken From Your Payments

The core of the new system is an automatic deduction. When you pay for a foreign digital service, your local financial service provider must withhold the tax before the payment leaves the country.

ZIMRA outlines the exact calculation intermediaries must use:

“Intermediaries are required to withhold Digital Services Tax as follows: 15.5% of the payment amount where the foreign supplier is not registered for VAT in Zimbabwe; or tax fraction of 3/23 where the foreign supplier is registered for VAT in Zimbabwe.”

This means a US$10 (approx. R180) monthly subscription could see US$1.55 (approx. R28) deducted as tax. The intermediary—which includes banks, building societies, and mobile money operators like EcoCash—must then issue a certificate to the consumer proving the tax was withheld.

Who Must Comply And What Are The Exceptions?

A wide net of local financial institutions are now legally designated as tax collectors. These ‘intermediaries’ are responsible for filing returns by the 10th of each month and paying the collected tax to ZIMRA by the 15th.

There are important exemptions. Services that are zero-rated or exempt within Zimbabwe remain so under this new rule.

ZIMRA lists these protected categories:

“Educational services; medical services; and financial services as defined in section 2 of the VAT Act.”

Furthermore, foreign suppliers with a turnover exceeding US$25,000 (approx. R475,000) in any twelve-month period must register for VAT in Zimbabwe through the Tax Administration and Revenue Management System (TaRMS). Local businesses that are VAT-registered can claim this tax back as input tax, provided they have a valid invoice from the foreign supplier.