Zimbabwe – Increase of the VAT Rate and Introduction of Digital Services Withholding Tax 

The Minister of Finance has presented the final version of the National Budget for the 2026 financial year to the Parliament. The proposed Budget 2026 includes essential changes to the country’s consumption tax framework.

Key changes to the indirect tax framework 2026 

• Increase of the general VAT rate from the current 15% to 15.5% 
• Introduction of the Digital Services withholding Tax 

New Framework and Impact 

To increase state revenues from transaction taxes, the Minister of Finance proposed raising the standard VAT rate from January 1, 2026. 

There is also a proposal to introduce a Digital Services Withholding Tax, which would replace the current VAT on imported services. This tax will be charged on all payments made to foreign digital platforms, including e-hailing services, online content-sharing fees, and the like. Intermediary financial institutions will withhold the tax. 

The Budget 2026 has been submitted for discussion to the Parliament on November 27, 2025. 

Domestic and non-resident e-commerce vendors and digital service providers should carefully monitor the “destiny” of these measures; if adopted in the manner and framework presented, the impact will be noteworthy and arrive very soon.