News / National
Mthuli Ncube imposes 15% tax on Starlink, Google
52 mins ago |
103 Views
Zimbabwe will impose a 15 percent digital services withholding tax on payments to offshore tech platforms, including Google, YouTube, and satellite internet provider Starlink, beginning January 1, 2026. The tax, announced by Finance Minister Mthuli Ncube in the 2026 national budget, will be collected by banks, mobile money operators, and other intermediaries.
Ncube said the tax targets revenue generated by non-resident digital platforms providing services directly to Zimbabwean users without a physical presence in the country. These include e-hailing services, digital streaming, satellite internet, online content, advertising, and e-commerce platforms. "These entities are generating significant income from domestic consumers and businesses. However, the current tax framework does not adequately capture income accruing to non-resident digital service providers, resulting in substantial revenue leakages," he said.
The minister explained that payments for subscriptions, commissions, e-hailing fees, and internet access charges are largely remitted offshore without VAT, creating base erosion risks and giving foreign companies an unfair advantage over fully taxed domestic service providers. The 15 percent withholding tax will effectively replace VAT on imported digital services.
Analysts have warned the new tax could affect Zimbabweans who rely on digital platforms, potentially reducing advertising reach, monetisation, and affordability. The top 50 Zimbabwean YouTubers, who earn between US$23,469 and US$73,380 per month according to Social Blade, may see reduced earnings under the new levy. Ride-hailing services like InDrive are also expected to pass on the additional cost to consumers through higher fares.
In addition, Ncube removed the qualifying threshold for the existing 5 percent electronic commerce operators tax, meaning all foreign e-commerce platforms serving Zimbabwe must now comply, regardless of revenue size.
Tech analyst Jacob Mutisi described the move as effectively double taxation. "It is bad because you are taxing a company that is going to be taxed in America as well. Depending on US taxation, assuming 15 percent, this could amount to a 30 percent total tax burden," he said. Mutisi noted that the tax aligns with global trends but warned it could make the market more complex, reduce attractiveness, and create compliance challenges for Zimbabwean accountants and SMEs.
Other countries, including India, Kenya, Nigeria, and Uganda, have implemented similar digital taxes, often resulting in higher consumer costs and operational adjustments by tech platforms. Mutisi said careful negotiation is usually necessary to avoid conflicts over double taxation and gross-up demands from multinational companies.
The new tax reflects Zimbabwe's efforts to capture revenue from the rapidly expanding digital economy while addressing concerns over base erosion and competitive fairness. However, it comes amid growing global tensions over the taxation of digital services.
Ncube said the tax targets revenue generated by non-resident digital platforms providing services directly to Zimbabwean users without a physical presence in the country. These include e-hailing services, digital streaming, satellite internet, online content, advertising, and e-commerce platforms. "These entities are generating significant income from domestic consumers and businesses. However, the current tax framework does not adequately capture income accruing to non-resident digital service providers, resulting in substantial revenue leakages," he said.
The minister explained that payments for subscriptions, commissions, e-hailing fees, and internet access charges are largely remitted offshore without VAT, creating base erosion risks and giving foreign companies an unfair advantage over fully taxed domestic service providers. The 15 percent withholding tax will effectively replace VAT on imported digital services.
Analysts have warned the new tax could affect Zimbabweans who rely on digital platforms, potentially reducing advertising reach, monetisation, and affordability. The top 50 Zimbabwean YouTubers, who earn between US$23,469 and US$73,380 per month according to Social Blade, may see reduced earnings under the new levy. Ride-hailing services like InDrive are also expected to pass on the additional cost to consumers through higher fares.
In addition, Ncube removed the qualifying threshold for the existing 5 percent electronic commerce operators tax, meaning all foreign e-commerce platforms serving Zimbabwe must now comply, regardless of revenue size.
Tech analyst Jacob Mutisi described the move as effectively double taxation. "It is bad because you are taxing a company that is going to be taxed in America as well. Depending on US taxation, assuming 15 percent, this could amount to a 30 percent total tax burden," he said. Mutisi noted that the tax aligns with global trends but warned it could make the market more complex, reduce attractiveness, and create compliance challenges for Zimbabwean accountants and SMEs.
Other countries, including India, Kenya, Nigeria, and Uganda, have implemented similar digital taxes, often resulting in higher consumer costs and operational adjustments by tech platforms. Mutisi said careful negotiation is usually necessary to avoid conflicts over double taxation and gross-up demands from multinational companies.
The new tax reflects Zimbabwe's efforts to capture revenue from the rapidly expanding digital economy while addressing concerns over base erosion and competitive fairness. However, it comes amid growing global tensions over the taxation of digital services.
Source - The Standard
Join the discussion
Loading comments…
