Delta pushes for tax clarity

ROBIN PHIRI

Delta Corporation, a publicly traded brewing giant, is intensifying calls for urgent legislative reforms to bring clarity to the country’s complex tax regime, amid a ballooning US$73 million dispute with the Zimbabwe Revenue Authority (ZIMRA).

The ongoing battle—stemming from income tax and value-added tax (VAT) assessments for the period 2019 to 2022—has placed Delta at the centre of a broader private sector outcry over ambiguity in the country’s tax laws.

The disputed amount includes principal tax, penalties, and interest.

Acting chief executive officer Alexander Makamure told Business Times that the tax environment in Zimbabwe has grown increasingly burdensome and unpredictable.

“Tax issues in Zimbabwe have become increasingly complex due to political and economic dynamics, particularly the State’s strong interest in collecting revenue in foreign currency,” Makamure said. “We understand that position, but we urge authorities to amend the legislation to eliminate ambiguity and avoid protracted disputes.”

While acknowledging positive steps, including the introduction of Section 37AA to the Income Tax Act which provides clearer guidance, Makamure said VAT legislation remains a grey area that continues to spark confusion.

“A similar amendment needs to be made to the VAT Act,” he said. “What we’re concerned about is that ZIMRA-issued guidelines are being used to fill legislative gaps. That’s not sustainable. It creates confusion and unnecessary legal battles.”

Delta maintains that part of the assessments ignore the reality of tax payments made in Zimbabwean dollars during a period of rapid inflation and currency devaluation—payments whose value was severely eroded. Further aggravating the situation, the company argues that ZIMRA’s Tax and Revenue Management System (TaRMS) has misallocated some of its tax payments, leading to discrepancies with submitted returns.

“Delta is contesting these assessments on the grounds that certain amounts were payable exclusively in foreign currency, and that the company complied with the tax laws applicable at the time,” a company spokesperson said. “We are seeking resolution through appropriate legal and administrative channels.”

The case has already made its way through the country’s court system. Delta suffered losses at both the High Court and Supreme Court. In a further setback, the Constitutional Court recently denied the company leave to appeal, directing it to pursue remaining matters through fiscal courts.

Yet, despite these legal headwinds, Delta remains adamant that lasting resolution lies not in the courts, but in legislative clarity.

“We’re saying if there’s no resolution through the courts, then amend the law so it’s clearer for everyone,” Makamure said. “This isn’t just about Delta. Other companies are facing similar tax disputes—some involving smaller amounts, but the impact on those businesses is just as severe.”

He cited a proposal made by the Minister of Finance last year—aimed at allowing businesses to settle taxes in the same currency used at the time of payment—as a missed opportunity for reform.

“That proposal should have been adopted,” he said. “If a company paid its taxes in the legal tender of the day, that payment should be considered final. We need to stop looking backward and start focusing on how policy can support growth moving forward.”

Delta stressed that ongoing uncertainty is now directly affecting private sector strategy. In a multi-currency environment, companies are unable to plan effectively while tax obligations remain vulnerable to retrospective reinterpretation.

“Without clarity on how taxes are calculated and settled, businesses are operating under constant risk of penalties for decisions made in good faith,” a company official added.

Despite the setbacks, Delta is continuing its engagement with ZIMRA and government stakeholders. The company expressed cautious optimism about the tone of recent discussions.

“We are hopeful,” Makamure said. “We are in discussions with ZIMRA and the relevant arms of government, and we believe that through collaboration, we can find a lasting solution that promotes compliance without crippling the private sector.”

As Zimbabwe works to modernise its tax system and strengthen revenue collection, Delta’s case underscores the growing tension between fiscal enforcement and economic growth. The company reiterated its commitment to full compliance but argued that such compliance must be underpinned by fairness and legal certainty.

“Tax laws will always be subject to interpretation,” Makamure concluded. “But when those laws are vague or inconsistently applied, the result is uncertainty and costly litigation. What we need now is clarity that supports compliance and enables growth.”