Delta Beverages and ZIMRA Continue Legal Battle Over US$97 Million Tax Assessments

The disagreement covers the period between 2019 and 2022, with the total assessments reaching approximately US$97 million, including an earlier dispute involving about US$74 million.

At the centre of the disagreement is Delta's position that ZIMRA did not adequately recognise or adjust payments made in local currency during periods of severe economic instability and hyperinflation.

Presenting the company's financial results for the six months ended 30 September 2026, Delta chairman Todd Moyo said that although the validity of assessments relating to the 2019–2021 period had been confirmed, disagreements over the amounts and calculations remained unresolved.

He explained that issues concerning the assessment methodology, allocation of tax obligations and treatment of different currencies were still being considered by the Special Court for Income Tax Appeals, commonly known as the Fiscal Court.

Moyo also disclosed that a separate High Court application challenging the 2024 VAT assessments had not yet been concluded.

Additionally, the company was considering further legal proceedings concerning an additional income tax assessment issued in March 2026 for the 2021 financial year.

He noted that other routine tax reviews and audits could continue as part of the company's normal business operations.

Despite contesting the assessments, Delta said it had paid approximately US$22.8 million by 30 September 2026 under the country's pay-now-argue-later tax principle and existing payment arrangements.

The company expressed hope that any adjustments to its payment arrangements would be reasonable and take into consideration the circumstances surrounding the original payments.

Delta maintains that the principal amounts were settled in the legally recognised currencies at the time, based on what it considered a reasonable interpretation of the applicable tax laws.

The beverage manufacturer also indicated that it holds United States dollar-denominated Treasury Bills, which it hopes the Government could accept to offset any portion of the tax liability that may ultimately be confirmed as payable.

Moyo further defended the company's tax compliance record, describing Delta as a responsible taxpayer that regularly meets its obligations across different tax categories.

According to the chairman, the company paid more than US$193 million in taxes in Zimbabwe during the six-month reporting period, representing a 31 percent increase compared with the corresponding period in the previous year.

He also raised concerns about uncertainties within the country's tax legislation, arguing that unclear provisions could continue creating disagreements between businesses and tax authorities over the interpretation of tax obligations.

The ongoing dispute highlights the financial and legal complications arising from tax obligations accumulated during Zimbabwe's periods of currency instability, with the final outcome expected to clarify the treatment of disputed payments and assessments.

Source: NewZimbabwe.com