A major error in a new law has forced the government to issue urgent clarifications on a controversial tax. The Ministry of Finance has moved to explain the new 15% Digital Services Withholding Tax after a blunder in the Finance Act caused widespread confusion. The tax, which came into effect on 1 January 2026, was incorrectly written to apply too broadly. The Ministry’s press statement on 07 January 2026 aims to set the record straight on what you will and will not be charged for.
In the statement, the Ministry, led by Minister Mthuli Ncube, sought to clarify the core purpose of the levy. They stated it is not a new tax, but a new way to collect an existing one.
The Ministry’s press release explained:
“The DSWT was introduced to improve collection of VAT on imported services, and not as an additional tax. The measure is an administrative mechanism intended to enhance tax compliance by shifting the point of collection to regulated payment intermediaries, including banks, mobile money operators and other financial institutions.”
What Exactly Is Being Taxed?
The most critical part of the clarification addresses the scope of the tax. The Ministry provided a specific list of services that will incur the 15% charge at the point of payment. These are payments made to companies outside Zimbabwe for specific digital and remote services.
According to the official statement, the tax applies to:
-
Digital streaming and online content services
-
E-hailing and platform-based service fees
-
Online advertising services
-
Satellite-based and other cross-border digital access services
Crucially, the Ministry made a vital distinction that directly affects online shoppers. The statement was explicit:
“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 purchase of goods is not liable to the DSWT.”
This means payments for physical items like clothing, electronics, or books from foreign websites should not have this specific 15% Digital Services Withholding Tax added by your bank. The tax is intended for intangible services.
How Will It Work And Who Collects It?
The Ministry’s statement also clarified the mechanics of the tax collection. The 15% will be automatically withheld by the payment platform you use. This could be your bank when you use an international card, or a mobile money service.
The Ministry stated:
“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 Ministry also addressed concerns about double taxation. They confirmed that businesses or individuals who are already formally declaring and paying VAT on these specific imported services through their own tax returns will not be subject to the withholding tax on the same transactions. The government says the Zimbabwe Revenue Authority (ZIMRA) will issue detailed guidance to banks and other financial institutions to ensure the rules are applied correctly.
For the average citizen, the key takeaway is that subscriptions to platforms like Netflix, Spotify, or YouTube Premium, as well as payments for services like Starlink internet, will now cost 15% more. The charge will be added automatically. Buying a physical product from an overseas online store should not trigger this specific charge, though normal customs duties may still apply when the item arrives in the country.
Flipcash is Your Trusted PayPal & Crypto Exchange Partner in Zimbabwe — WhatsApp +263 77 163 9263
The post Ministry Of Finance Clarifies On 15% Digital Services Withholding Tax After Error In Finance Act: How It Affects You appeared first on iHarare News.
