Here is a summary of the key penalties imposed by the Zimbabwe Revenue Authority (ZIMRA) for late VAT registration, late filing, and late payment, based on the relevant tax legislation and recent public notices.
🛑 ZIMRA Penalties for VAT Non-Compliance
ZIMRA imposes three main categories of financial consequences for non-compliance: Penalties, Interest, and potential Prosecution.
1. Penalties for Late VAT Registration (Retrospective Registration)
Failing to register for VAT when a business’s turnover has already exceeded the mandatory threshold (currently US$25,000) is treated severely.1
| Non-Compliance Type | Penalty Charge | Note |
| Late Registration | Up to 100% of the unpaid VAT for the entire retrospective period. | This penalty is charged on the amount of Output VAT that the business should have collected and remitted to ZIMRA from the date the registration obligation commenced. |
| Compulsory Compliance | ZIMRA can compulsorily register the operator, backdate the registration, and require the payment of the entire VAT debt, penalties, and interest. | The failure to register constitutes an offence under the VAT Act. |
💡 Voluntary Disclosure Tip: If a business realizes it has passed the threshold and registers proactively, it can often approach ZIMRA under the Voluntary Disclosure Program (VDP) to negotiate a reduction or waiver of the penalties, though the principal VAT and interest remain payable.
2. Penalties for Late Filing of VAT Returns (VAT 7)
Timely submission of the VAT return is mandatory, even if the net VAT payable is zero (nil return) or a refund is due.
| Non-Compliance Type | Penalty Charge | Note |
| Late Submission | US$30 per day the return is outstanding. | This rate was proposed in the 2025 budget and is applied daily until the return is submitted. This penalty is charged regardless of whether tax is payable or not. |
3. Penalties for Late Payment of VAT
Payment of the VAT liability must be remitted by the due date (generally the 25th of the month following the tax period, but recent changes propose the 15th, or five days after the return).
| Non-Compliance Type | Penalty Charge | Note |
| Interest | Interest is charged on the overdue amount. | The rate is fixed by the Minister of Finance, and ZIMRA charges this interest for the duration the tax remains unpaid. |
| Late Payment | Variable Statutory Penalties | Penalties may be applied to the outstanding principal amount of tax, often calculated as a percentage that may escalate over time. |
4. Penalties for Non-Usage of Fiscal Devices (Fiscalisation)
VAT-registered operators are legally required to use approved Fiscal Devices for recording sales.
| Non-Compliance Type | Penalty Charge | Note |
| Failure to Fiscalise/Non-Usage | US$25.00 per Point of Sale (POS) for each day the taxpayer remains in default, up to 181 days. | After 181 days, continued non-compliance may lead to the business being guilty of an offence liable to a fine or imprisonment. |
Given the severity of these penalties—especially the 100% penalty on backdated VAT and the daily penalty for late filing—it is financially critical for businesses in Zimbabwe to maintain strict compliance and leverage professional accounting services.
