Zimbabwe to Introduce 15% Digital Services Withholding Tax from January 2026
It is aimed at enhancing revenue mobilization and creating a more equitable tax environment for local businesses.
The Zimbabwean government has announced the introduction of a 15% Digital Services Withholding Tax (DSWT), targeting payments made to foreign digital service providers. The measure, unveiled by Finance Minister Prof. Mthuli Ncube during the 2026 National Budget presentation, will take effect from January 1, 2026. It is aimed at enhancing revenue mobilization and creating a more equitable tax environment for local businesses.
The new levy will apply to a wide range of services supplied by foreign companies with no physical presence in Zimbabwe. Major global platforms such as Netflix, Spotify, and Amazon Prime, digital content subscriptions, satellite internet providers including Starlink, and ride-hailing applications like Bolt and inDrive will be affected. The tax will be collected at the point of transaction, with local financial institutions—including banks and mobile-money operators—acting as paying agents responsible for withholding the 15% tax before funds are transferred abroad. The DSWT effectively replaces the traditional Value Added Tax (VAT) on imported digital services.
Minister Ncube explained that the measure is necessary due to the rapid digitization of the economy, which has led to increased consumption of online services supplied by foreign companies that previously escaped taxation. He emphasized that the new tax will promote fair competition, as local service providers are currently subject to full domestic taxation, while foreign platforms benefit from an uneven playing field. Zimbabwe’s move aligns with a growing international trend, with similar policies adopted in African countries including Nigeria, Kenya, Uganda, Tanzania, and Sierra Leone.
The introduction of the DSWT is expected to impact both consumers and digital service providers. Users may face increased costs as foreign platforms either absorb the tax or pass it on through higher subscription fees, fares, or commissions. Public concerns have also emerged, with some expressing fears of potential double taxation, particularly for services like Starlink that may already charge VAT. Additionally, there is a risk that some consumers may use foreign bank cards to bypass the withholding tax, which could undermine the government’s revenue goals.
