MASIMBA Holdings Limited has been slapped with US$2,47 million and ZiG2,71 million in backdated taxes by the Zimbabwe Revenue Authority (Zimra), underscoring mounting corporate concerns over retrospective tax assessments that are straining cash flows and complicating investment planning.
These assessments, which cover value-added tax (VAT) and income tax, were recognised in the group’s 2025 financial statements for the period ended December 31, 2025, after management concluded they represented a liability that existed at year-end.
The dispute reflects broader concerns raised by legal experts, who argue that Zimra’s increasing use of retrospective assessments, particularly on VAT, creates uncertainty for businesses operating in Zimbabwe’s complex multi-currency environment.
Some analysts argue that certain assessments are based on reconstructed transactions and administrative interpretations that were not clearly defined in law at the time of compliance.
These additional tax assessments come as the constructor has authorised a further US$6,15 million in capital expenditure — nearly double the US$3,31 million approved in 2024 — with the projects set to be financed through internal resources and existing facilities.
In March 2026, Zimra completed a five-year tax review covering the 2019 to 2022 tax periods for Masimba Holdings, assessing VAT and income tax. The authority raised a bill of US$2 474 790 and ZiG2 708 056, comprising principal, interest and penalties.
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“The bill raised by Zimra provided evidence of a liability that existed as at year end and therefore management adjusted the results for 2025 to reflect the liability in the December 2025 financial results,” Masimba said in its 2025 annual report.
It added that no post-reporting events were expected to have a material impact on the group.
Masimba may be required to settle part of the obligation under the “pay now, argue later” principle, under which taxpayers must pay assessed amounts while pursuing disputes.
Analysts say the approach can strain liquidity, forcing companies to redirect working capital, delay investments, and adjust operational plans.
Other firms, including Innscor Africa, Delta Corporation, Inamo Investments, and Zimplats, have also faced historical tax assessments from Zimra. Zimplats is the only company to have successfully challenged such a claim, winning a ruling in January 2026 on historical royalty charges.
Masimba ended the period with an order book of US$278 million.
Chief executive officer Fungai Matahwa said demand for infrastructure remained strong across mining, energy, housing, transport, water and industrial projects, despite a difficult operating environment.
“These opportunities align well with the group’s capabilities and strategic priorities,” he said.
Matahwa said liquidity constraints, currency volatility, and policy shifts could affect project timing, funding flows, and execution risk.
Masimba said it would maintain a strong balance sheet, diversify revenue streams, and focus on disciplined capital allocation.
The group reported improved liquidity, with US$1,42 in current assets for every US$1 of short-term debt.