Delta loses US$74 million tax battle with ZIMRA

Delta Corporation has faced a major setback in its prolonged legal dispute with the Zimbabwe Revenue Authority (ZIMRA) after the Constitutional Court dismissed its appeal challenging previous rulings on disputed tax assessments amounting to approximately US$74 million.

The beverage giant has been contesting tax assessments issued by ZIMRA, arguing that the taxes should have been payable exclusively in foreign currency. Delta maintained that ZIMRA's assessments failed to consider local currency payments made at the time, which have since been eroded by currency depreciation.

The disputed tax assessments, which cover value-added tax (VAT) and income tax liabilities for the period between 2019 and 2022, were initially issued in 2022, with additional assessments levied in November 2024. Together, they total about US$74 million, including principal tax, penalties, and interest.

Following a series of rulings from the High Court and Supreme Court, Delta pursued further legal avenues, including appeals to the Constitutional Court and ZIMRA's internal appeals processes. By December 31, 2024, the company had already paid US$9.2 million under the "pay now, argue later" principle and through existing payment arrangements.

In its judgment, the Constitutional Court stated: "The application cannot succeed because it is not in the interests of justice for the court to interfere with the final decision of the court a quo where no fundamental procedural irregularity or violation of rights has been demonstrated."

This ruling represents a significant moment in the ongoing tax dispute, with the enforcement of these assessments poised to have considerable implications for Delta Corporation's financial health and operational stability.