Zimbabwe’s Digital Services Tax: What Is Really Being Taxed and Who Is Paying the Bill

Zimbabwe has introduced a 15 percent Digital Services Withholding Tax on certain cross-border digital and remote services starting in 2026. While the policy has been widely described as a tax on global technology companies, the legal structure of the measure tells a more precise and more consequential story.

This is not a tax on Netflix, Google, Amazon or Starlink. It is a tax on Zimbabweans and Zimbabwean businesses when they pay for digital services supplied from outside the country.

Understanding that distinction is essential to understanding how the tax will affect prices, startups and the future of Zimbabwe’s digital economy.

What exactly is being taxed

The Ministry of Finance has clarified that the 15 percent charge applies to payments made to non-resident companies for specific digital and remote services. These include:

• Digital streaming and online content services(Netflix, Spotify e.t.c)
• E-hailing and platform-based service fees(Indrive, Taxif)
• Online advertising services(Google ad, facebook ads e.t.c)
• Satellite-based and cross-border internet access(e.g. Starlink)
• Cloud services, software subscriptions and other remotely delivered digital services(e.g AWS )

Crucially, the tax does not apply to physical goods bought online. Imported items such as electronics, clothing or books remain subject to customs duty and VAT under existing law, but they are not subject to the Digital Services Withholding Tax.

The tax is aimed at intangible services, not ecommerce shipments.

How the tax is collected

The 15 percent tax is not paid by the foreign company. It is withheld by Zimbabwean banks and payment platforms when a local customer or business makes a payment to a foreign service provider.

Whether the payment is made using:

• An international card

• A bank transfer

• A mobile money platform

If it passes through a regulated Zimbabwean intermediary, the tax is deducted and sent to ZIMRA.

The foreign service provider receives its full invoice amount.

Who really pays

Because the tax is withheld from the Zimbabwean side of the transaction, the legal taxpayer is the Zimbabwean customer or business, not the foreign platform.

Netflix still charges its subscription price.
Google still charges for advertising.
Amazon Web Services still charges for cloud hosting.

The extra 15 percent is added to the payment made from Zimbabwe.

This makes the Digital Services Withholding Tax economically similar to the long-standing withholding tax on imported services such as consulting fees, management fees and software licences. Digital services have simply been added to that category.

Impact on consumers

For individuals, the tax increases the cost of using international digital services. Streaming platforms, ride-hailing apps, satellite internet, online learning tools and subscription software will all become more expensive when paid for from Zimbabwe.

The increase will appear either as an explicit tax deduction on bank or mobile money statements or as a higher total amount charged.

Impact on Zimbabwean tech companies

The largest impact may be felt not by consumers but by local technology businesses.

Zimbabwean startups, software developers, fintechs and SaaS companies rely heavily on foreign digital infrastructure, including:

Cloud hosting and storage
Software platforms and developer tools
Payment gateways
AI and data services
Security and communications systems

Every payment made for these services now attracts the 15 percent withholding tax.

Unlike VAT, this tax cannot be reclaimed or offset. It becomes a permanent part of the company’s cost structure. For a business spending tens of thousands of dollars a month on cloud services, the additional tax materially changes profitability and pricing.

This means local digital products become more expensive to build, making Zimbabwean tech companies less competitive both locally and internationally.

How this compares with other countries

In South Africa and Rwanda, foreign digital services are generally subject to VAT. Both local and foreign suppliers charge VAT, and businesses can recover input VAT, which limits distortion.

In Kenya and Nigeria, foreign digital companies are increasingly taxed based on their economic presence and revenue from local users. This brings global platforms into the domestic tax net.

Zimbabwe’s approach places the tax burden on the local payer rather than the foreign supplier. It is administratively simple but shifts the cost to Zimbabwean users and businesses.

What to watch going forward

The Digital Services Withholding Tax will increase government revenue from the digital economy. But it will also raise the cost of building and using digital services inside Zimbabwe.

For startups, SaaS providers and technology exporters, this could influence decisions about where to host systems, how to structure billing, and whether to move parts of their operations offshore.

The long-term challenge will be balancing revenue collection with the need to support a growing and competitive digital sector.