Delta’s tax battle with ZIMRA intensifies

ROBIN PHIRI

Delta Corporation Limited, the publicly traded beverages giant, has paid US$13.7 m to the Zimbabwe Revenue Authority (ZIMRA) under the country’s stringent “pay now, argue later” regime,  even as it fights disputed tax assessments totalling an extraordinary US$73m for the period 2019 to 2022.

In its third-quarter trading update, board chairman Todd Moyo confirmed that ZIMRA’s additional assessments encompass principal tax, penalties, and interest across value-added tax (VAT) and income tax.

“The group had paid a total of US$13.7 m  as of 30 September 2025 in line with the ‘pay now, argue later’ principle and pre-existing payment plans,” Moyo said.

“We believe any revisions to the payment plan will be rational, with due consideration of the financial health of the business and the fact that the principal amounts were fully paid in legal tender at the relevant periods, based on the best available interpretation of the legislation.”

Delta’s tax fight has already travelled the full judicial circuit. Both the High Court and the Supreme Court upheld ZIMRA’s position, prompting the company to escalate the matter. But the Constitutional Court declined to hear the appeal, steering the dispute back to Zimbabwe’s fiscal courts, a decision that significantly narrows Delta’s legal manoeuvring space while prolonging uncertainty.

Despite the setbacks, Moyo underscored that the company remains hopeful that any revised payment structure will be “reasonable,” stressing that the underlying taxes in dispute had already been settled during the affected periods. He also highlighted that the group holds substantial Government treasury bills which could potentially offset any final liability.

“The Company paid over US$147m in current taxes during the six months ended 30 September 2025 in Zimbabwe, an increase of 19% over the prior year,” he said. “Management continues to engage with ZIMRA while appealing some legal and factual issues of the assessments and the judgments, with guidance from tax experts and legal counsel.”

The magnitude of the assessments — combined with the rigidity of the “pay now, argue later” enforcement model — is fuelling unease across the corporate sector. Businesses argue that while the policy’s intention is to bolster tax compliance, its application has become punitive, particularly for large, capital-heavy firms navigating a hyperinflationary environment and rapidly shifting policies.

Moyo warned that persistent ambiguities in tax legislation have created “room for differing interpretations,” increasing the probability of future disputes and complicating planning horizons for major corporate players.

“At this stage, the Board cannot estimate the likely outcome or timing of the resolution of these matters,” he said. “The current accounting treatment and disclosures of the assessments and the amounts paid so far are considered to be appropriate.”

As one of Zimbabwe’s most important industrial bellwethers, Delta’s tax confrontation has evolved into a test case with broad implications.

Investors, local corporates and multinational firms are closely monitoring how ZIMRA, the courts and the Treasury ultimately resolve the matter — viewing the outcome as a measure of Zimbabwe’s regulatory predictability at a time when the government is aggressively courting global capital to stabilise and rebuild the economy.