Emcoz Urges Urgent Legal Correction on Digital Services Tax

Emcoz urges government to urgently amend the law on Zimbabwe’s digital services tax, warning of double taxation risks despite Treasury’s clarification (image source)

The Employers’ Confederation of Zimbabwe (Emcoz) has called on government to urgently issue a corrective statutory instrument to align the law with Treasury’s recent clarification on the 15% digital services withholding tax, which came into effect on 1 January 2026.

The tax, introduced under the 2026 National Budget and Finance Act 7 of 2025, applies to payments made from Zimbabwe to offshore digital platforms. These include e-hailing services, online advertising subscriptions, streaming and content services, satellite-based access, and other cross-border digital services. Confusion emerged over whether the levy also applied to purchases of goods from offshore e-commerce platforms such as Amazon, Alibaba, eBay and Be Forward.

Treasury issued a clarification on 7 January 2026, stating that online purchases of goods are not liable to the new tax. However, the clarification simultaneously broadened the scope of the levy to include all offshore payments for imported services, regardless of the payment channel used, as long as transactions are processed through regulated intermediaries in Zimbabwe.

Emcoz said while the clarification was a positive step, the Finance Act remains legally binding and continues to deem payments for goods and services supplied from outside Zimbabwe as locally supplied and therefore subject to the tax. “We expect and look forward to the issuance of the required corrective instrument because the Finance Act is already alive and cannot be corrected through the clarification statement only,” the confederation said.

The employers’ body warned that failure to urgently correct the law could result in double taxation on imported goods, effectively increasing costs by 15% for businesses and consumers. It urged that any interim tax collections be ring-fenced and refunded once the necessary legal amendment is effected. Analysts, including price-tracking platform Zimpricecheck, have cautioned that the digital services tax risks becoming more unpopular than the Intermediated Money Transfer Tax (IMTT) if implementation challenges persist.