In Zimbabwe, Section 50A of the Value Added Tax (VAT) Act [Chapter 23:12] provides the legal framework for the Value Added Withholding Tax system. Similar to other regional jurisdictions, this section allows the Commissioner of the Zimbabwe Revenue Authority (ZIMRA) to appoint specific registered operators as agents to withhold a portion of VAT during transactions.
Key details and recent updates regarding Section 50A governing VAT Withholding Tax in Zimbabwe.
1. Core Provisions of Section 50A
Under this section, the Commissioner identifies and appoints “Withholding Agents.” These are typically large-scale taxpayers, mining companies, or government bodies.
-
The Role of the Agent: When an appointed agent pays a supplier for taxable goods or services, they do not pay the full VAT amount to the supplier. Instead, they withhold a specific portion and remit it directly to ZIMRA.
-
The Benefit: This ensures that ZIMRA receives at least a third of the VAT due upfront, reducing the risk of suppliers disappearing before remitting the tax.
2. Key Rates and Recent Amendments
The landscape of VAT in Zimbabwe has seen significant changes recently, particularly with the 2026 National Budget.
| Feature | Current Status (as of 2026) |
| Withholding Rate | 1/3 (one-third) of the Output VAT charged on the invoice. |
| Standard VAT Rate | Increased from 15% to 15.5% (effective January 1, 2026). |
| Payment Deadline | Agents must remit the withheld tax by the 10th day of the following month. |
| New Digital Tax | Introduction of a Digital Services Withholding Tax in 2026, which interacts with how VAT on imported services is handled. |
Recent Amendments to Note:
-
VAT Rate Hike (2026): With the standard VAT rate moving to 15.5%, the absolute amount withheld (which is 1/3 of the VAT) has technically increased in value.
-
Expansion of Agents: ZIMRA has progressively updated the “Consolidated List of VAT Withholding Agents” to include more players in the retail and manufacturing sectors to ensure wider coverage.
-
Route to Market (Finance Act 2024): Amendments were introduced to penalize non-compliant players in the supply chain. For instance, manufacturers may be required to withhold tax or apply surcharges when dealing with non-compliant wholesalers or retailers.
3. Impact on the Supplier
If you are a supplier dealing with an appointed agent:
-
Withholding Certificate: The agent is legally required to issue you a VAT Withholding Tax Certificate.
-
Tax Credit: You do not lose this money. You claim the withheld amount as a credit on your VAT return (VAT 7 form). This reduces your final tax liability for that month.
-
Documentation: You must maintain a schedule of all amounts withheld by various agents to attach to your tax return for verification.
4. Penalties for Non-Compliance
Section 50A is strictly enforced. If an appointed agent fails to withhold or remit the tax:
-
The agent becomes personally liable for the amount they failed to withhold.
-
Additional penalties and interest are applied, similar to the late payment of standard VAT.
5. Current consolidated list of appointed VAT Withholding Agents in Zimbabwe.
In Zimbabwe, ZIMRA (Zimbabwe Revenue Authority) maintains a Consolidated List of Value Added Withholding Tax Agents who are appointed specifically under the authority of Section 50A of the VAT Act.
Below is a snapshot of the major entities that appear on the most recent consolidated list. These agents are legally required to withhold 1/3 (one-third) of the VAT on invoices from their registered suppliers.
Key VAT Withholding Agents by Sector
| Mining Sector | Manufacturing & Beverage | Retail & Wholesale |
| Zimplats (Zimbabwe Platinum Mines) | Delta Beverages | OK Zimbabwe |
| Mimosa Mining Company | Dairibord Zimbabwe | TM Supermarkets (Pick n Pay) |
| Murowa Diamonds | Schweppes Zimbabwe | N. Richards and Company |
| RioZIM Limited | British American Tobacco (BAT) | Mohammed Musa Wholesalers |
| Unki Mines | Cairns Foods | Brands Africa |
| Telecommunications | Utilities & Construction | Other Major Players |
| Econet Wireless | ZESA Holdings / ZETDC | Zimbabwe Power Company (ZPC) |
| NetOne Cellular | Beta Bricks | Zimkings Trading |
| Telecel Zimbabwe | PPC Zimbabwe / Lafarge Cement | National Foods Ltd |
Important Compliance Updates
-
Rate Change: Effective January 1, 2026, the standard VAT rate increased to 15.5%. This means while the fraction withheld remains 1/3, the total dollar amount withheld will be higher for all transactions occurring this year.
-
Digital Services Withholding: Under the 2026 Finance Act, a new Digital Services Withholding Tax has been introduced. Banks and mobile money operators (like EcoCash) are now appointed as agents to withhold 15.5% on payments made to foreign platforms (e.g., Netflix, Meta, AWS).
-
TaRMS System: All withholding tax returns (REV 5) and certificates must now be processed through the Tax and Revenue Management System (TaRMS) portal. Manual certificates are generally no longer accepted for credits.
What should you do if your client is on this list?
-
Request the Certificate: Ensure they provide you with a system-generated withholding certificate immediately after payment.
-
File the Credit: Use the certificate to claim a credit on your monthly VAT 7 return to reduce your cash tax liability.
-
Record Keeping: Keep these certificates for at least 6 years as per ZIMRA requirements.
