Zimbabwe Begins Collecting 15% Digital Services Tax on Netflix, Starlink and Other Offshore Platforms
Zimbabwean users of foreign-based digital platforms have begun paying a new 15 percent Digital Services Withholding Tax following the enactment of a revised tax framework aimed at capturing revenue from the rapidly expanding digital economy.
The tax, which took effect last week, applies to payments made to offshore digital service providers and is being deducted at the point of payment by banks, mobile money operators and other regulated financial intermediaries.
Finance Act Brings Offshore Platforms Into Tax Net
The new levy was introduced through the Finance Act, which was signed into law on Monday.
Authorities say the measure is designed to address long-standing revenue leakages arising from non-resident digital companies that generate substantial income from Zimbabwean users without maintaining a physical presence in the country.
Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube said the tax reforms are intended to protect Zimbabwe’s taxing rights and promote fairness within the tax system.
“Payments for digital services are largely remitted offshore without being subjected to value-added tax or income tax,” Ncube said, adding that the new measures help level the playing field between local and foreign service providers.
What Services Are Affected
Under the new regime, the withholding tax applies to a wide range of digital services provided by offshore companies.
These include subscription-based streaming platforms, online content services, digital advertising, e-commerce platforms, cloud computing services, online gaming, satellite-based internet access, and commissions charged by e-hailing applications.
The tax is charged in lieu of VAT on imported digital services and applies at the time of payment by local users.
Banks and Mobile Money Operators to Withhold Tax
According to the Finance Act, intermediaries such as banks and mobile money operators are legally required to withhold the tax when processing payments to foreign-domiciled digital service providers. The withheld amounts must be remitted to the Zimbabwe Revenue Authority (Zimra) within 30 days.
The law further requires intermediaries to issue taxpayers with a certificate detailing the gross payment amount and the tax withheld, in a format approved by the Zimra Commissioner.
Penalties for Non-Compliance
Failure to withhold or remit the Digital Services Withholding Tax will attract penalties, including liability for the unpaid tax and a 15 percent surcharge. However, Zimra retains discretion to waive penalties in cases where there is no intention to evade tax.
Rising Digital Consumption Drives Policy Shift
The move comes amid the growing use of digital services by Zimbabweans, who spend millions of dollars annually on platforms such as Netflix and other streaming services, Google and Meta advertising products, InDrive and other e-hailing services, online shopping platforms, cloud services, and satellite internet providers such as Starlink.
Authorities say the tax marks a significant step in aligning Zimbabwe’s fiscal policies with the realities of the modern digital economy.
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