Taxation is an important consideration for any business operating in Zimbabwe or looking to invest. For individuals it is also important for one to take special consideration of the tax implications of any transaction. It becomes essential to develop efficient tax strategies to enable investment and growth. This article provides a general overview of tax law in Zimbabwe.

Taxation Overview:

In Zimbabwe, the nature and the source of the income determine whether or not it is taxable. The identity and country of residence of the recipient are often irrelevant. Thus, generally, all receipts (not of a capital nature) arising from a source within Zimbabwe are taxed, irrespective of the residential status of the taxpayer. Income arising from sources outside Zimbabwe is taxable only if its source is “deemed” by the legislation to be within Zimbabwe.

Since the Income Tax Act [Chapter 23:06] does not define the “source", guidance on the subject is derived from case law. In CIR v Lever Bros and Unilever Ltd (1946) the applicable principle was that the source of receipts, received as income, is not where they come from, but the originating cause of their being received as income is the work which the taxpayer does to earn them.

The principle laid in the Lever Bros and Unilever Ltd case sets the pace for determining the source of income in Zimbabwe. The work which a taxpayer does may be a business which he carries on, or an enterprise which he undertakes, or an activity in which he engages and it may take the form of personal exertion, mental or physical, or it may take the form of employment of capital either by using it to earn income or by letting its use to someone else. Often the work is some combination of these.

One notable aspect in this regard though, is that the matter of whether receipts are remitted to Zimbabwe or not, is not relevant, thus making a taxpayer liable even for offshore receipts.

In determining the source of income in Zimbabwe, one would require to interpret and rely on the deeming provisions of the main statutes governing tax administration, Double taxation Agreements (DTAs) and Case law.

The Zimbabwe Revenue Authority is mandated at enforcing the provisions of the tax statutes.

Key statutes governing tax administration.

  • Finance Act Chapter 23:04
  • Revenue Authority Act Chapter 23:11
  • Income Tax Act Chapter 23:12
  • Value Added Tax Chapter 23:12
  • Capital Gains Tax Act Chapter 23:11
  • Customs & Excise Act Chapter 23:02
  • Stamp Duties Act Chapter 23:09
  • Estate Duty Act Chapter 23:03

Income Tax:

Zimbabwe presently operates on a source-based tax system. This means that income from a source within, or deemed to be within Zimbabwe will be subject to tax in Zimbabwe unless a specific exemption is available. The specific circumstances of a transaction should always be considered to determine whether the transaction gives rise to taxation in Zimbabwe.

Income earned by foreign companies from a source within, or deemed to be within Zimbabwe will be subject to tax in Zimbabwe. In such a case, one should determine whether the foreign entity is obligated to register a local entity. The rate of corporate tax and income earned by individuals from trade and investment is set out in the table below.

Details Finance Act Tax Rate
Income of individual from trade and investments 14 (2)b 24%
Income of company or trust 14 (2)c 24%
Income of pension fund from trade or investment 14 (2)d 15%
Income of licensed investor during first five years of operation 14 (2)e 0%
Income of licensed investor after first five years of operation 14 (2)e 24%
Income of a holder of special mining lease 14 (2)f 15%
Income of a company or trust derived from mining operations 14 (2)g 24%


Investment income

Investment income normally comprises of interest and dividends. Zimbabwe treats the Withholding Tax (WHT) deducted from investment income as a final tax; consequently, there is no need to declare this type of income on tax returns or to pay any additional tax.

Dividend income

'Dividends' means "any amount distributed by a company ... to its shareholders...". The WHT on dividends is at a rate of 15%, except in the case of distributions made from companies that are listed on the Zimbabwe Stock Exchange, where a lower rate of 10% is applicable.

Interest income

Interest arising in the name of Zimbabwe residents from ’financial institutions normally has a WHT of 15% deducted by the institution before it is paid to the investor. Non-resident persons are exempt from this WHT. Interest arising from sources other than ’financial institutions’ is subject to tax at the corporate tax rate.

Allowable deductions

Section 15 (2) the Act makes provisions for specific allowable deductions. Some of the deductions development and exploration costs.

Value Added Tax (VAT):

Where a local resident meets a particular threshold and is registered for VAT, the income received will be taxed at 15%.(The Finance Act Number 3 of 2019).

What is VAT?

Value Added Tax (VAT) is an indirect tax on consumption, charged on the supply of taxable goods and services. It is levied on transactions and on the importation of goods and services. The principal legislation is the Value Added Tax Act (Chapter 23:12).

What is the General Rate of VAT?

With effect from the 1st of January 2023 the general rate of VAT in Zimbabwe is 15%. Section 17 of the Finance (No.2) Act, 2022 which was gazetted on the 30th of December 2022 provides as follows;

The rate of value added tax in respect of—

(a) goods or services supplied by any registered operator in the course or furtherance of any trade carried on by the registered operator; and
(b) the importation of any goods into Zimbabwe by any person; and
(c) the supply of any imported services by any person; and
(d) goods and services sold through an auctioneer (as defined in section 56(6)) of the Value Added Tax Act [Chapter 23:12] by persons who are not registered operators shall be fifteen per centum.

Generally, all goods and services are standard rated unless specifically exempted, zero-rated or subject to VAT at a special rate.

i Zero-rate (0%)
Exports of goods from Zimbabwe to any address in an export country.
Basic foodstuffs such as sugar.

ii No value added tax is chargeable on exempt supplies. (Section 11 of the Act).

Examples of exempt supplies include:
• Financial services.
• Provision of electricity for domestic use.
• The supply of any medical services by any person or institution.
• Rates charged by Local Authorities.

Value Added Tax on Betting and Gaming:

The rate of value added tax in respect of transactions or receipts on betting and gaming as set out in the table in Part 11 of section 17 of the Finance (No.2) Act,2022 is generally 15%.

General Rate of Value Added Tax on Supply of Cellular Telecommunications Service: (Part 111 of Section 17 of the Finance Act (No.2) Act,2022)

The rate of value added tax in respect of the supply of cellular telecommunications services during furtherance of the supply of such service by a registered operator shall be 15%.

Customs Duty:

Customs and Excise Duty is administered in terms of the Customs and Excise Act [Chapter 23:02]. Tariff classification, valuation and origin are core customs compliance procedures and the main pillars for establishing liability for duties and VAT on imported goods. Imported and exported commodities need to be classified according to an appropriate tariff heading. The tariff classification code is directly linked to the rate of duty payable on that commodity. In Zimbabwe the general rate of Customs duty on imported goods ranges between 0%-40% (please confirm in a Tariff handbook). However, depending on the imported commodity, preferential rates of duty may be applicable.

Zimbabwe is a signatory to a number of trade agreements with different countries which it confers preferential rate of duties on imported commodities from such countries (when accompanied with the relevant proof of origin). Most notable are the following agreements:

COMESA (consisting of African countries)
SADC (consisting of African countries)
AfCTA (consisting of African countries)

Excise Duty is levied on certain locally manufactured goods, certain luxury or non-essential items) and this is administered under the Excise Tariff.

Because ZIMRA is in the position to control and prevent the importation or exportation of commodities, it acts as an agent on behalf of numerous other government institutions or organisations to ensure that commodities, in terms of other legislation, are not imported or exported illegally when it is a requirement from other departments or institutions that permits must be issued. Therefore, it should also be noted that certain commodities will require valid permits before they are imported or exported.

Capital Gains Tax:

Capital Gains Tax (CGT) is an amount levied on the capital gain arising from the disposal of a specified asset in terms of section 6 of the Capital Gains Tax Act [Chapter 23:01]. Specified assets mean immovable property (land and buildings) and any marketable security (debentures, shares, unit trusts, bonds, intellectual property). Valuations for the purpose of determining the values of the assets will also be required by the taxing authority (ZIMRA), together with proof of payment for the property (if case of a sale).

Rates of Capital Gains Tax
The table below summarises the CGT rates as provided for in terms of the Finance Act (Chapter 23:04):

Specified Assets Tax rate in ZWL Tax rate in USD
Specified Assets acquired before 22nd February 2019 and sold from 22nd February 2019. 5% of gross capital amount 5% of gross capital amount
Specified Assets acquired from 22nd February 2019 and sold from that date and after. 20% for each dollar of the capital gain 20% for each dollar of the capital gain


The taxation of Capital Gains is split into two transactions as shown above. In respect of the first class (before 22 February 2019) the Capital Gain is determined to be the gross value and in respect of the second class (after 22 February 2019) capital gain is determined in terms of the normal rules.

The Seller of a specified asset has the obligation to pay Capital Gains Tax when disposing of a property. However, the Seller may be exempted from paying Capital Gains Tax in certain specified instances. Some of the exemptions are set out below.

  1. Where the property is the primary residence and the seller is over the age of 55.
  2. A sale by the Executor out of of a deceased estate.
  3. Transfers of any specified assets between spouses.
  4. Transfer of principal private residence between former spouses following a divorce order.

Stamp Duty (Tax on property purchase)

In Zimbabwe, stamp duty is payable on the registration of title upon acquisition of immovable property. The Stamp duty is calculated in accordance with the Schedule to Chapter II of the Finance Act [Chapter 23:04] as read with the Stamp Duties Act [Chapter 23:09].

In terms of the Stamp Duties Act, stamp duty is calculated using the declared value of the property or the consideration payable as at the date of acquisition of property. The date of acquisition is also defined as the date on which the transaction was entered into or the date on which the person who acquired the property became entitled to it. In other words, stamp duty is charged on the current fair market value of the property or the purchase price.

The Registrar of Deeds will require declarations from both parties to the transaction indicating the value of the property and the improvements thereon and this is to ensure that the adequate and appropriate duty is paid.

The Stamp duty calculations in terms of the Schedule to Chapter II of the Finance Act [Chapter 23:04] are currently as follows;

Value of property $ Charge
0 – 5 000.00 1% + $70.00
5 000.00 – 20 000.00 2% + $70.00
20 000.00 – 100 000.00 3% + $370.00
100 000.00 – OVER 4% + $2 770.00


For example:

Calculation of stamp duty payable on acquisition of property valued at $4 000.00
Duty is = (1% * 4000) + 70
= 40 + 70

2. Calculation of stamp duty payable on acquisition of property valued at $50 000.00
Duty is = 3% * ($50 000.00 – 20 000.00) + 370
= (3% * 30 000.00) + 370
= 900 + 370
= $1 270.00

3. Calculation of stamp duty payable on acquisition of property valued at $120 000.00
Duty is = 4% * (120 000.00 – 100 000.00) + 2 770.00
= (4% * 20 000.00) + 2 770.00
= 800 + 2 770.00
= $3 570.00

The law places exemptions from payment of stamp duty on registration of an acquisition of immovable property in certain circumstances which are listed in item 5 to the Schedule to Chapter II of the Finance Act, which include the following;

  1. Property acquired by way of inheritance
  2. Property acquired in terms of a divorce order
  3. Property acquired by an ecclesiastical, charitable or educational body which is recognised by the Government as being of a public character as approved by the Minister
  4. A joint owner of the property who acquires sole ownership in the whole property
  5. Registration of a correction of an error in the registration of the acquisition of the property where the stamp duty has already been paid
  6. Property acquired by a local authority from a State through a transaction not involving purchase and sale.

Deceased Estates Taxes:

Masters Fees

All deceased estates are liable to pay a tax of 4% of the value of the Estate to the Master of High Court. Normally, the estate should be able to cater for its own expenses. However, if the estate cannot pay for its own expenses, the beneficiaries may make cash contributions to avoid the sale of assets

Estate Duty Tax

It is the tax charged on the value of estates exceeding a certain amount as may be gazetted.

Total Assets subtract Total Liabilities subtract Principal residence subtract Family Car Subtract Rebate = Dutiable Amount
5% of the Dutiable amount is the estate duty payable

For assistance please contact the author Nobert Musa Phiri and the corporate practice group at info@mmmlawfirm.co.zw

Further reading:

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Muvingi & Mugadza Legal Practitioners, AGA's law firm representative in Zimbabwe, is a distinguished law firm whose expertise and practice has continued to expand and evolve over the years to meet its clients’ requirements. Formed in 1982 the experienced and specialised legal practitioners at the firm offer the full range of legal services and are committed to delivering them in line with the firm values, those being, integrity, excellence, respect and innovation.