Zimra’s tax dragnet hits Masimba with multimillion-dollar bill
BUSINESS WRITER
Publicly traded Masimba Holdings Limited has been caught in the Zimbabwe Revenue Authority (Zimra)’s widening tax dragnet after being slapped with a multimillion-dollar backdated tax bill, underscoring growing concerns among corporates over retrospective assessments that are straining cash flows and complicating investment planning.
The construction group was assessed US$2,47m and ZiG2,71m in additional value-added tax (VAT) and income tax liabilities following a five-year tax review conducted by Zimra.
The assessments were recognised in Masimba’s financial statements for the year ended December 31, 2025, after management concluded that the liabilities existed at year-end.
The latest development adds Masimba to a growing list of companies ensnared in Zimra’s aggressive pursuit of historical taxes, amid increasing concern from legal and tax experts that retrospective assessments are creating uncertainty for businesses operating in Zimbabwe’s complex multi-currency environment.
The additional tax burden comes as the contractor has approved US$6,15m in capital expenditure for 2026, nearly double the US$3,31m authorised in 2024. The projects are expected to be funded through internal resources and existing facilities.
In March 2026, Zimra completed a review covering the 2019 to 2022 tax periods and raised assessments amounting to US$2 474 790 and ZiG2 708 056, inclusive of principal amounts, interest and penalties.
“The bill raised by Zimra provided evidence of a liability that existed as at year end and therefore management adjusted the results for 2025 to reflect the liability in the December 2025 financial results,” Masimba said.
The company added that it was not aware of any post-reporting events likely to have a material impact on the group.
Under Zimbabwe’s “pay now, argue later” principle, Masimba could be required to settle part of the assessed amounts while pursuing any dispute process.
Analysts say the approach often places pressure on liquidity, forcing companies to divert working capital, defer investments and adjust operational priorities.
Several listed firms, including Innscor Africa, Delta Corporation, Inamo Investments and Zimplats, have in recent years faced historical tax claims from Zimra. Zimplats remains the only company to have successfully challenged such an assessment, securing a favourable ruling in January 2026 over historical royalty charges.
Despite the tax headwinds, Masimba closed the year with an order book valued at US$278m.
Chief executive officer Fungai Matahwa said demand for infrastructure projects remained strong across the mining, energy, housing, transport, water and industrial sectors despite difficult operating conditions.
“These opportunities align well with the group’s capabilities and strategic priorities,” he said.
Matahwa, however, cautioned that liquidity constraints, currency volatility and policy changes could affect project timelines, funding flows and execution risks.
Masimba said it would continue focusing on maintaining a strong balance sheet, diversifying revenue streams and pursuing disciplined capital allocation.
