Global Daily Tax News, Zimbabwe To Raise VAT Rate, (Dec 5, 2025)

Zimbabwe has announced plans to raise the nation's value-added tax rate from 15 percent to 15.5 percent, in its recently announced Budget.

The Government has announced plans to introduce a royalty on gold mining, depending on the international price for gold, of three percent when the price per ounce is up to USD1,200; five percent when the price per ounce is over USD1,200 and up to USD2,500; and 10 percent when the price per ounce is above USD2,500.

Further, the Government has announced the introduction of a digital services withholding tax, to be levied in place of VAT on imported services, for payments made to offshore digital platforms, including for ride-hailing services, for online content, and for satellite internet services. The tax will be withheld by payment processing firms.

New tax breaks will be introduced for manufacturers that persistently produce goods 24 hours a day, including additional tax deductions for certain expenditure incurred during extended operational hours; accelerated wear-and-tear allowances on plant and equipment used in round-the-clock production cycles; and priority access to import duty concessions.

The Intermediated Money Transfer Tax will be lowered for domestic currency transactions from two percent to 1.5 percent. The IMTT rate for foreign currency transactions will remain two percent. Payments of IMTT will also be made deductible for corporate tax purposes.

The Budget announces the introduction of a deduction for interest expenses paid to financial institutions, "subject to appropriate safeguards to prevent abuse, including transfer pricing rules, thin capitalization principles, and anti erosion measures."

A suite of tax breaks will be introduced for Business and Knowledge Process Outsourcing ventures, including:

• Suspension of customs duty on the importation of specified equipment by qualifying Business and Knowledge Process Outsourcing operators;

• A flat 15 percent Corporate Income Tax rate, in line with the Domestic Minimum Top Up Tax, subject to meeting certain conditions;

• An immediate expensing measure for capital investments;

• Exemption from the non-resident tax on dividends;

• A tax credit of USD1,500 per employee per year against corporate income tax under the Youth Employment Tax Incentive (YETI) framework; and

• A flat tax rate of 15 percent on skilled essential expatriate staff.