ZIMBABWE’S tax assessment regime has emerged as a major obstacle to domestic investment and corporate planning, with business leaders warning that uncertainty surrounding tax laws is costing companies millions of dollars and undermining confidence in the economy.
A new legal analysis seen by NewsDay Business argues that the Zimbabwe Revenue Authority’s (Zimra)'s growing reliance on backdated tax assessments, particularly on value added tax (VAT), is creating significant financial and operational risks for businesses.
The report raises concerns that taxpayers are increasingly being forced to settle disputed tax obligations upfront under the controversial “pay now, argue later” principle, even where the legal basis for those assessments remains contested.
Over recent weeks, concerns have intensified over Zimra’s accumulation of retrospective tax liabilities linked to VAT assessments, with legal experts questioning whether courts have effectively allowed administrative practices to evolve into binding law without adequate statutory backing.
“Zimbabwe’s tax assessment regime has become one of the key disabling factors to domestic investment and corporate planning, with business leaders citing the risks of unclear tax legislation as affecting their decision-making,” the analysis said.
“The current multi-currency reassessment architecture places obvious strain on the design of VAT administration and on the conditions under which any form of ‘pay now, argue later’ can properly be justified in a constitutional order committed to lawful and accountable public finance.”
According to the analysis, recent court rulings, including Inamo Investments, Zimplats Holdings Limited, and Delta Corporation, have upheld Zimra's powers to reconstruct multi-currency tax liabilities. However, the report argues that these decisions may have allowed administrative practices to harden into law despite a lack of clear legislative authority, particularly in relation to VAT calculations.
“The present reassessment practice proceeds as if local-currency and foreign-currency liabilities had always stood on separate legal rails, yet the Value Added Tax Act does not clearly enact a bifurcated VAT computation regime,” the report said.
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“The objection is therefore not rhetorical but exact. On VAT, there is no safe basis for treating administrative notices or later practice as though they lawfully created a dual-currency computation system that Parliament itself had never clearly put in place.”
The analysis contends that taxpayers who complied with tax filing requirements as they existed at the time are now facing substantial reassessments under frameworks that were never clearly established in legislation.
It argues that this shifts the issue beyond administrative efficiency into questions of legality and constitutional governance.
“The methodological concern becomes sharper when one turns to the reasoning in the judgments themselves,” the report says.
“The case law has too readily moved past the contra fiscum principle, notwithstanding a field marked by genuine uncertainty over whether the relevant statutes actually state the computation, allocation and settlement consequences later attributed to them.”
Under the contra fiscum doctrine, ambiguities in tax legislation should generally be interpreted in favour of taxpayers rather than the tax authority.
The report specifically revisited the Inamo Investments v Zimra judgment of 2022, in which the High Court ruled that VAT operators could not offset input tax denominated in Zimbabwe dollars against output tax owed in United States dollars.
According to the analysis, the ruling dealt primarily with remittance obligations rather than the broader question of how mixed-currency VAT liabilities should be calculated.
“Section 38(4) speaks to remittance. It does not, without more, answer the prior question of how a mixed-currency net VAT liability is to be computed. To make it do both jobs is to allow a remittance provision to perform the work of a computation rule,” the report states.
A similar concern is raised regarding the Zimplats ruling. While the court accepted an administrative approach where direct tracing of tax liabilities was not possible, the analysis argues that the judgment did not resolve whether Parliament had ever legislated the broader tax computation architecture now being relied upon by revenue authorities.
The report notes that Finance Act No. 8 of 2022 later introduced Section 37AA, which formally incorporated Public Notice 26 of 2019 as a default formula for certain tax calculations. However, the legislation did not provide for retrospective application to periods before January 2022.
“The argument, then, is not that no assessment power exists. It is that no tax may be imposed, computed or coercively enforced except on the basis of law enacted by Parliament,” the report said.
The analysis identifies what it describes as a series of structural weaknesses within the current system, including computation gaps, statutory-footing gaps, credit-recognition gaps, and procedural fairness concerns.
It also questions the legal status of Public Notice 15 of 2019, which effectively introduced a bifurcated VAT return system that later became central to tax reassessments.
“If the VAT7 was altered to sustain a bifurcated return and computation model, that required statutory footing through regulations made by the Minister under section 78, not merely an administrative notice,” the report argues.
The report further notes that Public Notice 68 of 2022 introduced separate tax returns and foreign-currency business partner numbers from January and November 2022, respectively, but contends that these later administrative changes cannot retrospectively validate earlier tax assessments.
“Administrative notices may explain administration; they cannot do the work of regulations or the work of Parliament,” the analysis states.
Beyond legal questions, the report warns of the practical impact on businesses.
“The real sting of a pay-now-argue-later system is felt immediately in the damaging consequences that follow once a disputed assessment is issued, and recovery pressure begins before the legal foundation has been properly tested,” it states.
“For the taxpayer, that can mean acute cash-flow strain, impaired working capital, financing stress, reputational damage, and commercial decisions being distorted by the need to respond to a coercive fiscal demand first and argue later.”
The analysis cites reports of a major corporation receiving substantial tax assessments in December 2025 that were later partially reversed, arguing that such cases highlight weaknesses in the current system.
It concludes that tax collection powers must be supported by stronger governance safeguards, including transparent assessment processes, recognition of prior payments, clear reasons for tax demands, and effective mechanisms for suspending collections while disputes are being resolved.
