Harare, Zimbabwe | Delta Corporation Limited could be facing a tax liability of up to US$329 million for the financial year ending 31 March 2025, depending on the outcome of ongoing legal challenges against additional tax claims issued by the Zimbabwe Revenue Authority (ZIMRA).
The company is contesting assessments totaling US$74.8 million, which could significantly add to its already hefty tax bill if the appeals are unsuccessful.
The disputed assessments revolve around several contentious areas, including exchange rate application, the sugar content levy of US$0.001 per gram, value-added tax (VAT), excise duties, and corporate income tax.
During a recent briefing to analysts, Delta’s leadership broke down its tax obligations, stating that the company had already recognized US$254.15 million in confirmed tax liabilities. Of this, US$230.35 million related to indirect taxes such as VAT, excise, and the sugar tax, while US$23.8 million was paid as income tax. Compared to the previous year, indirect tax payments rose by 19%, and income tax surged by an extraordinary 516.52%.
In addition to the taxes already acknowledged, Delta is appealing against further ZIMRA assessments. Should the appeal process fail, the total tax responsibility for the 2025 financial year would climb to US$329 million.
Delta CEO Matlhogonolo Valela warned that prolonged disputes over tax obligations and exchange rate inconsistencies were generating considerable financial unpredictability. He noted that the company continues to engage with authorities to arrive at mutually acceptable, long-term solutions.
To cushion the impact of these financial demands, Delta increased product prices—an adjustment that contributed to US$807.47 million in revenue for the year, a 5% rise from the prior period. This growth was driven partly by higher volumes in lager beer and price adjustments in response to the sugar tax, according to Delta chairman Todd Moyo in a statement accompanying the financial results.
Moyo also revealed that roughly 80% of local sales during the year were conducted in foreign currency, although this fluctuated in response to exchange rate movements and enforcement of dual pricing rules in the retail market.
Furthermore, improved exchange rate management helped reduce losses by 70.33%, with foreign exchange losses falling to US$12.32 million, contributing to a 16% increase in net profit, which rose to US$116.14 million.
Delta has challenged ZIMRA’s assessments, which cover VAT and income tax for the 2019–2022 period. The company argues that the tax authority failed to properly account for local currency payments made during those years, which have since been devalued due to inflation and currency depreciation.
The tax challenges have already seen unfavorable rulings from both the High Court and the Supreme Court. However, Delta has escalated the matter, with cases now pending before the Constitutional Court and under consideration through ZIMRA’s internal appeals process.
As of the end of March 2025, Delta had already paid US$11.4 million under the “pay now, argue later” requirement and existing repayment arrangements. The company also indicated that it might consider using its substantial holdings of Treasury Bills as a potential means to settle any remaining tax liabilities.