HARARE – The cumulative tax assessments levied by the Zimbabwe Revenue Authority (ZIMRA) against Delta Corporation and its associate, African Distillers, have escalated to approximately US$97 million, the beverages giant confirmed recently.
This figure marks a significant increase of US$24 million from the US$73 million reported last year, with a substantial portion of the liability linked to the 2021 assessment period.
Delta Corporation is actively engaged in efforts to resolve a protracted dispute concerning historical tax obligations and the methodologies employed for currency conversion. The company is formally contesting ZIMRA’s assessments, particularly those amounts it argues should have been exclusively payable in foreign currency.
The corporation maintains that the assessments do not adequately recognize local currency payments made during the relevant periods, the value of which was subsequently eroded by inflation and currency depreciation. Despite previous legal challenges that saw its objections dismissed by the High Court, Supreme Court, and Constitutional Court, Delta remains steadfast in its position.
A core aspect of Delta’s contention is its assertion that ZIMRA is retrospectively applying apportionment methods, specifically the turnover-ratio method, which the company claims was not explicitly stipulated in law when the taxes became due. Furthermore, regarding Value Added Tax (VAT), Delta argues that the tax authority is relying on methodologies introduced through public notices rather than provisions directly enshrined in legislation.
Speaking after an analyst briefing for the financial year ending March 2026, Mr. Matlhogonolo Valela, Group Chief Executive of Delta Corporation, reiterated the company’s commitment to constructive engagement with the tax authority. “The arithmetic must be corrected, the methods must be corrected and we are engaged now. We are talking. We are correcting each other and where we are found at fault, we are happy to pay,” Mr. Valela stated. “Where we think that we are correct, we are showing ZIMRA what we have done and I believe, in the spirit of willingness to engage, we should find solutions. It is only a matter of time before we do. But the company must not be bankrupted by taxes because we can pay and stop doing everything else. It is unfortunate because, as an industry, we believe we are properly paying taxes.”
Mr. Valela further highlighted that a critical point of discussion revolves around the currency used for settling historical obligations and the mechanisms governing currency transitions. “The question that is on the table is which currency and the currency transition mechanism,” he affirmed.
Delta Corporation consistently asserts that it fulfilled all its tax obligations using the legal tender applicable at the time, at rates prescribed by law, and based on the most accurate interpretation of the regulations then in force. The company’s primary grievance is that ZIMRA is re-indexing the United States dollar component of the assessments without equivalently recognizing the value of taxes already remitted in local currency during the same period.
The escalating assessments have generated apprehension within Zimbabwe’s corporate sector. Businesses have cautioned that retrospective tax claims could adversely impact operational stability, investment planning, and long-term sustainability. In adherence to Zimbabwe’s “pay now, argue later” principle, companies are mandated to settle disputed tax obligations upfront while pursuing redress through legal or administrative channels. Delta Corporation has already remitted approximately US$18.7 million to ZIMRA under this arrangement. The company argues that this outflow of capital weakens working capital positions and constrains expansion initiatives.
Business leaders have also voiced concerns that the re-indexation of historical liabilities, without adequate consideration for prior payments, undermines the legal principle of nominalism and fosters an environment of prolonged tax uncertainty. This dispute arises at a time when senior Treasury officials, including the Minister of Finance, Economic Development and Investment Promotion, Professor Mthuli Ncube, and Permanent Secretary Mr. George Guvamatanga, have consistently advocated for dialogue and amicable engagement in resolving complex fiscal matters.
Delta Corporation has indicated that it is pursuing resolution through both judicial processes and direct engagements with ZIMRA and Treasury authorities. The company also places significance on the potential application of Statutory Instrument 60 of 2024, believing it could materially influence the outcome of the dispute if tax positions originally filed in local currency are accurately converted to ZiG and prior payments are fairly recognized.
Analysts suggest that the eventual resolution of the Delta-ZIMRA dispute could establish a crucial precedent for Zimbabwe’s business environment, particularly concerning the authorities’ approach to inter-currency tax obligations and historical tax settlements. A capital markets analyst remarked, “The outcome could determine whether the Government adopts a fair-value inter-currency settlement framework or continues aggressive re-indexation practices that companies argue threaten the viability of compliant taxpayers.”
In a related matter, Mr. Valela confirmed that Delta Corporation is also engaging authorities regarding the impact of the sugar tax, which has significantly affected profit margins within the beverages segment. He stated, “We are fully engaged with the authorities on sugar tax and we are hopeful that our engagement will deliver a solution. We are very clear that the sugar tax has affected margins, both in the cordials and sparkling beverages segments. We have somewhat absorbed the sugar tax. It is over US$30 million that we paid this year, but it cannot continue indefinitely.” Mr. Valela concluded by noting that while the company has adjusted its pricing structure to mitigate some short-term pressure, a sustainable long-term solution would necessitate regional alignment on sugar taxation.
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