Govt Orders ZIMRA To Ignore Law and Stop Applying 15% Digital Tax On ALL Foreign Payments Following Major Blunder In Finance Act

Govt Orders ZIMRA To Stop Applying 15% Digital Tax On ALL Foreign Payments Following Blunder In Finance Act

The government has ordered the Zimbabwe Revenue Authority (ZIMRA) to stop applying a new 15% digital tax on all foreign payments. This urgent directive comes after a major blunder was discovered in the recently passed Finance Act. The tax was only supposed to target digital services like Netflix and Starlink.

A confidential letter from the Ministry of Finance, dated 05 January 2026, reveals the significant error. The Secretary to the Treasury, George Guvamatanga, wrote to ZIMRA Commissioner General Regina Chinamasa, stating the law had been incorrectly drafted. The letter instructs ZIMRA to ignore the written law and apply the tax as the government originally intended. It reads:

“As you would be aware, the Hon. Minister of Finance, Economic Development and Investment Promotion, through the 2026 National Budget, introduced a Digital Services Withholding Tax on imported services, in lieu of VAT at the standard rate, applicable on payments made to offshore digital platforms.

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.”

The ministry, through Guvamatanga, has directed ZIMRA to immediately inform banks and other payment platforms to prevent double taxation on physical goods imported into the country. The error is set to be formally corrected by the Office of the Attorney General.

Public Discovers Tax Blunder 

The news of the major error was announced by news outlet newZWire, which posted details of the Treasury letter on social media. Their post explained the situation to the public, stating:

“However, according to a Treasury letter to ZIMRA, the Finance Act was written incorrectly; it made it sound like the tax must apply not only to services, but also to goods bought from outside Zimbabwe. ZIMRA has been told to apply the tax as Govt intended, not as the error in the law suggests. An SI will be needed to correct it.””

This revelation caused immediate concern among citizens. User Antonio Mpofu responded to the newZWire post, expressing frustration about the broader tax burden. He wrote:

“So instead of 15% on digital services they are now, saying 15% on all foreign payment we also add 2%IMMT plus bank charges. So basically this government is anti-people.”

Legal Storm Erupts Over “Unlawful” Fix

The government’s attempt to fix its mistake with a simple letter has sparked a fierce legal controversy. Prominent lawyer and former MP Fadzayi Mahere directly challenged Finance Minister Mthuli Ncube on X. She accused the ministry of acting illegally by instructing ZIMRA to bypass the actual law. In a post on 07 January 2026, she wrote:

“Good day Minister Mthuli Ncube, Are you aware that your directive to ZIMRA to go beyond the letter of the law in implementing the digital services tax is illegal? If you want to tax people beyond what is stated in the law, do you know that you would need to amend the Finance Act accordingly in line with due process and procedure?

What does this ‘mistake’ say about the enactment of the Finance Act and the Budget process? This tax is a product of Parliament and can’t be changed by you single-handedly and unilaterally in flagrant violation of all know ln law and procedure. It’s a mess.”

Mahere argued that a minister cannot unilaterally change an act of parliament. She concluded her statement strongly, saying,

“The law as contained in the Act is bad enough but your attempt to amend the law through a letter is patently unlawful and invalid. Are there no lawyers in the Ministry to advise you on this? Have ZIMRA’s lawyers advised you that your instruction is invalid?”

The 15% Digital Services Withholding Tax was first announced by Minister Ncube in his budget speech to parliament on 27 November 2025. He stated it would target payments to offshore digital platforms, replacing the standard VAT on those services for more efficient collection.