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Masimba, Zimplow face US$4m backdated tax bill
6 hrs ago |
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Two Zimbabwe Stock Exchange-listed companies, Masimba Holdings and Zimplow Holdings, have become the latest corporates to be drawn into tax disputes with the Zimbabwe Revenue Authority (Zimra) after receiving retrospective tax assessments totalling nearly US$4 million.
The assessments add to a growing list of tax disputes involving some of Zimbabwe's largest companies and underscore ongoing disagreements between businesses and the tax authority over the interpretation of tax laws during the country's complex multi-currency period between 2019 and 2022.
In its 2025 annual report, Masimba Holdings disclosed that Zimra had completed a five-year audit covering value-added tax (VAT) and income tax obligations for the period under review.
Following the audit, the revenue authority issued an assessment amounting to US$2.47 million and ZiG2.71 million, covering principal tax, penalties and interest.
"In March 2026 Zimra concluded a five-year tax review of 2019 to 2022 tax periods for Masimba Holdings Limited for the tax heads of Value-Added Tax and Income Tax. Zimra upon completion of the audit raised a bill of US$2 474 790 and ZiG2 708 056 being principal, interest and penalty for VAT and Income Tax for the period under review," the company said.
Masimba indicated that management had recognised the assessment as a liability and adjusted its 2025 financial results accordingly.
Meanwhile, Zimplow Holdings revealed that it had received additional VAT and income tax assessments amounting to US$1.4 million and ZiG231,616.
According to Zimplow chairman Benjamin Kumalo, the dispute centres on differing interpretations of legislation relating to the currency in which taxes should be settled and the methods used in tax calculations.
"Differing interpretations of the law with Zimbabwe Revenue Authority regarding currency of settlement for tax and approach in tax computations; Zimra raised an additional income tax and VAT assessment for the period 2019 to 2022," Kumalo said.
"From the assessment, Zimra raised an additional tax obligation of US$1.4 million and ZiG231 616. The tax assessment was received in January 2026 and engagements with Zimra for a review on the assessment are underway."
The developments have reignited debate around Zimra's controversial "pay now, argue later" principle, which requires taxpayers to settle disputed assessments before legal challenges are fully resolved.
Business organisations and tax professionals have repeatedly argued that the policy places significant pressure on corporate cash flows, disrupts investment plans and creates uncertainty for companies already operating in a difficult economic environment.
Concerns have also been raised over the growing use of retrospective assessments linked to Zimbabwe's multi-currency era, with some legal experts arguing that certain tax interpretations were not clearly established at the time taxpayers fulfilled their obligations.
Several major corporates have faced similar disputes in recent years, including Delta Corporation, Innscor Africa, Inamo Investments and Zimplats.
Zimplats successfully challenged one of the largest historical assessments earlier this year after obtaining a favourable ruling relating to disputed royalty claims.
Despite the latest assessment, Masimba remains optimistic about its future prospects.
The construction and engineering group reported an order book valued at US$278 million at the end of 2025 and has approved capital expenditure of US$6.15 million for the current financial year, almost double the US$3.31 million authorised in 2024.
"Looking ahead, we remain confident in the fundamentals that support Masimba's long-term growth. Demand for infrastructure across mining, energy, housing, transport, water, industrial and private sector developments remains significant," said chief executive officer Fungai Matahwa.
"These opportunities align well with the group's capabilities and strategic priorities. We are also mindful that the operating environment will continue to be challenging and will require careful management."
At Zimplow, management said the company had formally challenged the assessment and was pursuing an appeal through Zimra's legal processes.
"Zimplow disputes the basis of assessments and has engaged Zimra for an appeal. The matter is currently under review by the Zimra Legal Office," the company said.
To minimise enforcement risks while the dispute is being reviewed, Zimplow has entered into a payment arrangement with Zimra's debt management division.
"Notwithstanding the ongoing dispute, management has entered into a payment arrangement with the Zimra Debt Office to mitigate enforcement risk and ensure continued compliance with statutory obligations."
The company added that it remained financially stable and capable of meeting its obligations while pursuing its appeal.
The latest assessments are likely to intensify calls from business leaders for greater clarity and consistency in the interpretation of tax laws, particularly those relating to transactions conducted during Zimbabwe's volatile multi-currency period.
The assessments add to a growing list of tax disputes involving some of Zimbabwe's largest companies and underscore ongoing disagreements between businesses and the tax authority over the interpretation of tax laws during the country's complex multi-currency period between 2019 and 2022.
In its 2025 annual report, Masimba Holdings disclosed that Zimra had completed a five-year audit covering value-added tax (VAT) and income tax obligations for the period under review.
Following the audit, the revenue authority issued an assessment amounting to US$2.47 million and ZiG2.71 million, covering principal tax, penalties and interest.
"In March 2026 Zimra concluded a five-year tax review of 2019 to 2022 tax periods for Masimba Holdings Limited for the tax heads of Value-Added Tax and Income Tax. Zimra upon completion of the audit raised a bill of US$2 474 790 and ZiG2 708 056 being principal, interest and penalty for VAT and Income Tax for the period under review," the company said.
Masimba indicated that management had recognised the assessment as a liability and adjusted its 2025 financial results accordingly.
Meanwhile, Zimplow Holdings revealed that it had received additional VAT and income tax assessments amounting to US$1.4 million and ZiG231,616.
According to Zimplow chairman Benjamin Kumalo, the dispute centres on differing interpretations of legislation relating to the currency in which taxes should be settled and the methods used in tax calculations.
"Differing interpretations of the law with Zimbabwe Revenue Authority regarding currency of settlement for tax and approach in tax computations; Zimra raised an additional income tax and VAT assessment for the period 2019 to 2022," Kumalo said.
"From the assessment, Zimra raised an additional tax obligation of US$1.4 million and ZiG231 616. The tax assessment was received in January 2026 and engagements with Zimra for a review on the assessment are underway."
The developments have reignited debate around Zimra's controversial "pay now, argue later" principle, which requires taxpayers to settle disputed assessments before legal challenges are fully resolved.
Business organisations and tax professionals have repeatedly argued that the policy places significant pressure on corporate cash flows, disrupts investment plans and creates uncertainty for companies already operating in a difficult economic environment.
Concerns have also been raised over the growing use of retrospective assessments linked to Zimbabwe's multi-currency era, with some legal experts arguing that certain tax interpretations were not clearly established at the time taxpayers fulfilled their obligations.
Several major corporates have faced similar disputes in recent years, including Delta Corporation, Innscor Africa, Inamo Investments and Zimplats.
Zimplats successfully challenged one of the largest historical assessments earlier this year after obtaining a favourable ruling relating to disputed royalty claims.
Despite the latest assessment, Masimba remains optimistic about its future prospects.
The construction and engineering group reported an order book valued at US$278 million at the end of 2025 and has approved capital expenditure of US$6.15 million for the current financial year, almost double the US$3.31 million authorised in 2024.
"Looking ahead, we remain confident in the fundamentals that support Masimba's long-term growth. Demand for infrastructure across mining, energy, housing, transport, water, industrial and private sector developments remains significant," said chief executive officer Fungai Matahwa.
"These opportunities align well with the group's capabilities and strategic priorities. We are also mindful that the operating environment will continue to be challenging and will require careful management."
At Zimplow, management said the company had formally challenged the assessment and was pursuing an appeal through Zimra's legal processes.
"Zimplow disputes the basis of assessments and has engaged Zimra for an appeal. The matter is currently under review by the Zimra Legal Office," the company said.
To minimise enforcement risks while the dispute is being reviewed, Zimplow has entered into a payment arrangement with Zimra's debt management division.
"Notwithstanding the ongoing dispute, management has entered into a payment arrangement with the Zimra Debt Office to mitigate enforcement risk and ensure continued compliance with statutory obligations."
The company added that it remained financially stable and capable of meeting its obligations while pursuing its appeal.
The latest assessments are likely to intensify calls from business leaders for greater clarity and consistency in the interpretation of tax laws, particularly those relating to transactions conducted during Zimbabwe's volatile multi-currency period.
Source - The Independent
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