Delta tax bill hits US$88.5m

CLOUDINE MATOLA

Zimbabwe’s largest brewer, Delta Corporation, paid US$88.5m in current taxes during the quarter to June 30, 2026, reinforcing its position as one of the country’s biggest taxpayers, Business Times can report.

The tax contribution represents a 23% increase from the US$72m remitted during the corresponding period last year.

Group company secretary Faith Musinga said Delta remained among the largest contributors to the national fiscus.

“The group paid US$88.5m in current taxes in Zimbabwe during the quarter, maintaining its position as one of the largest contributors to the fiscus,” Musinga said.

Delta also continued to shoulder the burden of the sugar tax, accruing US$7.3m during the quarter, up from US$6.7m in the comparable period last year. The company said it was engaging authorities to review the tax regime.

“The group accrued an equivalent of US$7.3m in sugar tax across the affected non-alcoholic beverage categories during the quarter. The group continues to engage the authorities on a review of the sugar tax regime,” she said.

The beverages giant is also seeking to resolve a US$97m tax dispute involving additional foreign currency-denominated income tax, value-added tax, interest and penalties.

As at June 30, 2026, Delta had paid US$20.8m to the Zimbabwe Revenue Authority (ZIMRA) under the “pay now, argue later” principle and existing payment arrangements. The company is seeking Treasury approval to offset part of the outstanding liability using its holdings of US dollar-denominated Treasury Bills.

“The Group had paid a total of US$20.8m as at 30 June 2026 in line with the ‘pay now, argue later’ principle and existing payment arrangements. It also holds US dollar-denominated Treasury Bills and continues to seek approval for these instruments to be applied against any portion of the liability that may ultimately become payable,” Musinga said.

The unresolved tax issues, Delta said, continue to weigh on the group’s competitiveness.

Despite these challenges, the company delivered a strong financial performance during the quarter, with revenue rising 23% to US$296.4m from US$238.9m in the prior-year period.

Musinga attributed the growth to robust volume expansion across the Zimbabwean operations, limited price increases in the sparkling beverages segment and an improved sales mix.

However, profitability came under pressure from escalating input costs, including fuel, freight, polyethylene terephthalate (PET) packaging, utilities, imported raw materials and the sugar tax. The group also cited geopolitical tensions and global supply chain disruptions as additional cost drivers.

Even so, Delta reported improved profitability, supported by strong volume growth, economies of scale, better operating leverage and disciplined cost management.

Looking ahead, the company said sustaining its growth trajectory would depend on a stable policy environment, currency stability and fiscal measures that enhance the competitiveness of local manufacturers.

“Sustaining policy consistency, currency stability and a review of fiscal measures affecting the competitiveness of local manufacturers will be important in preserving the current growth momentum,” Musinga said.