Africa Coronavirus Forex Law Tax Zimbabwe

E-Commerce Tax in Zimbabwe

Due to the various National Lockdowns which have been imposed the world over as a result of COVID- 19, many companies have had to adapt and begin to engage in electronic means of providing their goods and services. The adaptation has been necessary and has allowed businesses to service their existing markets and even wider markets during this time.

Geographical boundaries are becoming less and less prohibitive as people resort to procuring goods and services online, even goods and services they did not utilise before. The adaptation, however, brings into sharp focus how businesses will be taxed on providing these services, especially where local Zimbabweans are purchasing goods and services online from foreign companies.

Section 12 of the Income Tax Act [Chapter 23:06] imposes a tax on what is termed “Electronic Commerce Operator” in Zimbabwe. An Electronic Commerce (“E-Commerce”) Operator is defined as “an operator selling, providing or delivering services from outside Zimbabwe by the use of a telecommunications network or electronic means (and whether mediated by computers, mobile telephones or other devices) to customers or users in Zimbabwe.” The definition encompasses websites such as, and even service providers such as Netflix et cetera which are very popular amongst Zimbabweans.

The tax is imposed on any amount “receivable” by or on behalf of a foreign domiciled E- Commerce Operator from any person resident in Zimbabwe. This sum could be for provision or delivery of good and services, so even delivery companies that are based offshore and are paid by Zimbabwean residents to make deliveries anywhere in the world may be subjected to this tax.

The monetary threshold to trigger the income tax is on the E-Commerce Operator in Zimbabwe is revenues in the sum of US$500k in any one year of assessment from a Zimbabwean source. The Income Tax Act provides that the E-Commerce Operator has 30 days from reaching the monetary threshold to appoint a representative taxpayer in Zimbabwe.


At a time where the revenue authorities have encountered declined revenues due to the impact of COVID-19 and the National Lockdown in Zimbabwe on businesses, tax on E- Commerce is a potential source of revenue. The questions arise, however, on how viable this tax is as a source of income.

The first hurdle is the revenue threshold of US$500k for any one E-Commerce Operator. Whilst that level of revenue is achievable, it is unlikely that many foreign E-Commerce Operators are generating that level of revenue from Zimbabwe. Zimbabwe is experiencing foreign currency shortages and, therefore, the legitimate allocation of foreign currency to make payments to E-Commerce Operators is likely to be dwindling.

Zimbabwe’s foreign currency challenges have also given rise to an apparently thriving parallel market. Many consumers’ payments to E-Commerce Operators appear to be made through parallel market means which are neither officially monitored nor officially recorded anywhere.

Finally, there is the question of the ability to actually monitor the activities of E-Commerce Operators in Zimbabwe and how much each has generated and whether they have reached the threshold in order to be taxed. In the event that one does not voluntarily register, one wonders whether the revenue authorities are equipped to identify who is operating in Zimbabwe and how much revenue they have generated.

The point is made, however, that there are some E- Commerce Operators who shall willingly comply as part of their internal compliance measures. However, whilst the tax on E- Commerce may generate some much-needed revenue for the country, making the tax effective will require time and robust measures, which include addressing the leakage caused by parallel market activities.

Source: LinkedIn article by Manokore Attorneys

1 comment

  1. African software and other e commerce goods should be tax exempt from the free Africa trade zone..fist start to encourage African trade integration..

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