Delta Corporation: US$97M ZIMRA Tax Dispute Heads to Special Court

• Delta Corporation is engaged in a tax dispute with ZIMRA over approximately US$97 million in VAT and income tax assessments for 2019-2022.
• The core of the dispute involves ZIMRA's alleged failure to credit local currency payments made during hyperinflationary periods.
• The case is currently before the Special Court for Income Tax Appeals, with specific challenges to quantification, methodology, apportionment, and currency characterisation.
• Delta has already paid US$22.8 million towards the disputed liabilities, adhering to the "pay now, argue later" principle.
• Delta's chairman highlighted pervasive ambiguities in Zimbabwe's tax legislation, which contribute to ongoing interpretational disagreements.

Moyo explicitly pointed out the "pervasive" Zimbabwe tax legislation ambiguities, which he believes consistently create risks for further disagreements in interpretations under the current tax framework.

Delta Corporation is currently embroiled in a significant tax dispute with the Zimbabwe Revenue Authority (ZIMRA), involving assessments totaling approximately US$97 million. This substantial disagreement, which encompasses both value-added tax (VAT) and income tax, is now under review by the Special Court for Income Tax Appeals. The contested period spans from 2019 to 2022, and the total figure includes an earlier claim amounting to US$74 million.

At the heart of the Delta Corporation ZIMRA tax dispute is the company's contention that ZIMRA failed to appropriately credit or adjust for payments made in local currency during periods marked by hyperinflation. This critical point forms the basis of Delta's challenge against the assessments, highlighting the complexities of taxation in a volatile economic environment. The company maintains that its payments were made in legal tender at the time, based on what it considered a reasonable interpretation of the law.

Todd Moyo, chairman of Delta, recently provided an update on the group's financial performance for the six months ending September 30, 2026, where he addressed the ongoing tax issues. While the validity of the assessments covering the 2019 to 2021 period has been acknowledged, their accuracy and the method of their calculation remain vigorously contested. The Zimbabwe Revenue Authority tax appeal before the fiscal appeal court specifically targets the quantification, methodology, apportionment, and currency characterisation of these assessments.

Further complicating the legal landscape, a High Court declaratory application concerning the 2024 VAT assessments is still pending. Additionally, Delta is considering further proceedings related to a March 2026 additional income tax assessment for the 2021 financial year. In adherence to the "pay now, argue later" principle, a common practice in Zimbabwean tax law, Delta has already remitted US$22.8 million towards the disputed liabilities as of September 30, 2026, under existing payment arrangements. This demonstrates the company's compliance while actively pursuing its legal challenge.

Despite the significant Delta Corporation VAT assessment and income tax dispute, the company has affirmed its commitment to fulfilling its fiscal responsibilities. During the half-year period, Delta paid over US$193 million in taxes within Zimbabwe, marking a 31% increase compared to the same period in the previous year. Moyo expressed hope that any future revisions to the payment plan would be both rational and aligned with national interests, especially given that the principal amounts were settled using legal tender at the time of payment.

The company has also suggested that its US dollar-denominated Treasury Bills could be utilized by the government to offset any portion of the liability that might ultimately be determined as payable. This ongoing ZIMRA hyperinflation tax payments dispute underscores a broader issue within the nation's financial system. Moyo explicitly pointed out the "pervasive" Zimbabwe tax legislation ambiguities, which he believes consistently create risks for further disagreements in interpretations under the current tax framework. This highlights the need for clearer guidelines to prevent similar disputes in the future.

This case highlights the ongoing challenges and ambiguities in Zimbabwe's tax legislation, particularly concerning hyperinflation adjustments and currency characterisation for VAT and income tax assessments. Lawyers and compliance officers should review their clients' past and current tax positions, especially for the 2019-2022 period, to proactively identify and address similar potential disputes with ZIMRA, and monitor the Special Court's decision for precedent.

Source: Original reporting via New Zimbabwe.