Zimbabwe picks foreign firm to collect taxes from e-commerce, crypto and content creators

accreditation
0:00
play article
Subscribers can listen to this article
E-commerce, cryptocurrency transactions and content creators are among new businesses included into the tax bracket in Zimbabwe.
E-commerce, cryptocurrency transactions and content creators are among new businesses included into the tax bracket in Zimbabwe.
iStock

E-commerce, cryptocurrency transactions and content creators are among new businesses included into the tax bracket in Zimbabwe.

"The Republic of Zimbabwe entered into a public-private partnership agreement with Daedalus World Limited of Tortola, British Virgin Islands, in terms of which Daedalus World Limited will assist the Republic of Zimbabwe by providing a revenue collection service through taxing qualifying companies that provide digital advertising, content, cloud computing, e-commerce [and] gambling," reads part of a general notice published by Zimbabwean ICT Minister Jenfan Muswere on 19 January.

The notice says companies offering "betting, gaming and cryptocurrency services to persons and organisations within the territory of the Republic of Zimbabwe" will also now be subject to taxation, with the revenue set to be collected by Daedalus World.

Zimbabwe currently outlaws banks from cryptocurrency transactions. The inclusion of cryptocurrencies into the list of companies to be taxed has raised expectations that Zimbabwe could now be moving towards regulation and taxation of digital currencies such as Bitcoin, joining South Africa that already taxes such transactions.

The new tax revenue collection agreement will target content and digital advertising companies such as YouTube, Google, Facebook and others in addition to e-commerce entities.

Zimbabwe’s increasingly informal economy has witnessed a boom in e-commerce activities, with trade between Zimbabwe and South Africa as well as China and Dubai – from where most e-commerce traded goods are being sourced – increasing.

According to BDO, the global accountancy firm, there will be separate legislation for a compliance framework covering submission of returns, payment of tax and the due date for such payments, among other compliance requirements” for the new e-commerce levies.

The new e-commerce regulations will also likely encompass satellite broadcasters, adds BDO in a note on Zimbabwe’s tax framework.

The government has been seeking ways to prop up revenue collections and is levying a $50 fee on imports of smartphones for which import duty would not have been paid. Telecom and tech industry players say the new measures are a set back for e-commerce and efforts to boost the internet penetration rate in the country.

In a separate notice published 19 January, the Zimbabwe Revenue Authority directed that the "provision of data and airtime by employer to employee for use at home or outside work premises is a benefit which is taxable in the hands of the employee".

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Rand - Dollar
15.82
+0.3%
Rand - Pound
19.74
+0.3%
Rand - Euro
16.74
+0.3%
Rand - Aus dollar
11.17
+0.1%
Rand - Yen
0.12
+0.3%
Gold
1,843.85
+0.1%
Silver
21.96
+0.2%
Palladium
1,987.12
-1.1%
Platinum
962.50
-0.5%
Brent Crude
112.04
+2.6%
Top 40
61,478
-0.4%
All Share
68,083
-0.2%
Resource 10
72,709
+1.9%
Industrial 25
73,759
-2.7%
Financial 15
15,902
+1.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot