Mthuli Ncube Unveils E-Commerce Tax Aimed at Streaming Services and Digital Content
Zimbabwe’s Finance Minister, Mthuli Ncube, has unveiled a groundbreaking tax initiative focused on the burgeoning digital landscape. A newly implemented e-commerce tax will specifically target financial transactions related to streaming services, online content providers, and diverse digital offerings.
This announcement, presented during the 2026 National Budget on 27 November 2025, underscores the government’s intent to capitalise on the expanding digital economy, amidst assurances from the tax authority that no entity will be neglected.
The tax, dubbed the Digital Services Withholding Tax, will be levied on funds directed towards international digital companies. The primary objective is to ensure that these offshore platforms contribute to Zimbabwe’s fiscal resources.
Scope of the New Tax: Monitoring Your Digital Expenditures
The budgetary declaration issued by the Ministry of Finance delineates the specific services subject to this innovative tax. The government is particularly honing in on payments made to “offshore digital platforms.”
Minister Mthuli Ncube has identified three principal categories subject to this tax:
“e-hailing fees, online content charges, and satellite-based internet access fees.”
This indicates that the tax could encompass a multitude of everyday digital services utilised by Zimbabweans. For instance, payments for global ride-hailing platforms such as inDrive and Uber will fall under its purview.
Additionally, subscriptions to worldwide streaming services like Netflix, Showmax, Disney+, and YouTube Premium are included.
Furthermore, the taxation will likely extend to music streaming services like Spotify and Apple Music, as well as “satellite-based internet access fees,” targeting providers such as Starlink.
This initiative builds upon prior warnings issued by the Zimbabwe Revenue Authority (Zimra). On 26 September 2025, Zimra’s Commissioner for Domestic Taxes, Misheck Govha, emphasised their commitment to ensuring comprehensive compliance.
“We have no one we are going to leave behind as far as registration is concerned, for those who are BNBs and inDrive,” remarked Commissioner Govha.
Operational Mechanism of the Tax and Its Implications
The newly instituted tax will operate as a withholding levy. Consequently, the deduction will occur automatically during the payment transaction. The onus will lie with local banks and financial institutions within Zimbabwe.
As outlined in the official budget statement, the tax will be withheld by “paying agents that include financial institutions.” Thus, when utilising a local bank card, mobile payment, or any other Zimbabwean payment mechanism for an international service such as Netflix or inDrive, your financial institution will deduct the tax prior to the funds exiting the country.
This development may yield various repercussions for consumers. Most notably, there may be an effective rise in the cost of these services. For example, if a streaming subscription is priced at US$10 monthly, the withholding tax would be assessed on top of that amount. The precise tax rate was not articulated in the budget document.
Alternatively, international platforms may opt to absorb the tax burden. However, given that the structure of this tax is a withholding levy on payments to the platforms, such an outcome appears less probable, as funds are deducted before reaching them.
The Broader Context: Additional Tax Reforms
The introduction of this digital tax is not the sole significant reform unveiled. Minister Ncube also addressed the contentious Intermediated Money Transfer Tax (IMTT), widely recognised as the 2% tax. He proposed a partial reduction of this charge.
The budget statement indicated:
“Review of Intermediated Money Transfer Tax from 2% to 1.5% in order to promote use of local currency and lower transaction costs. IMTT on foreign currency transactions will be maintained at 2%.”
This adjustment comes on the heels of mounting pressure, including a resolution from the ruling ZANU PF party in October 2025 advocating for the tax’s repeal.
Nonetheless, the Minister also suggested an increase in the standard VAT rate, which will increase by 0.5% to reach 15.5%, effective 1 January 2026.
Source link: Iharare.com.
