LIGHT manufacturer Innscor Africa Limited is calling for more “appropriate policy refinements” on taxation after paying US$3,19 million in sugar tax during its half-year to December 31, 2025, with the levy emerging as a major cost driver.
The Special Sugar Content Excise Duty, introduced in January 2024, continues to weigh heavily on formal beverage manufacturers, prompting Innscor to intensify engagements with authorities while also challenging additional tax assessments from the Zimbabwe Revenue Authority (Zimra) in court.
The company argues that the current tax regime distorts competition by disproportionately burdening compliant local producers, while imported and non-compliant products gain a pricing advantage on the domestic market.
During the period under review, Innscor remitted US$3,19 million in sugar tax, bringing its cumulative contribution to US$13,29 million since the levy’s introduction.
Chairperson Addington Chinake said the tax has become a significant cost of doing business for local beverage manufacturers.
“Sugar tax represents a significant ‘cost of doing business’ for the local beverage manufacturing sector and is borne by compliant, local beverage manufacturers, placing the products produced by these operators at a distinct price disadvantage to non-compliant beverage producers and, in particular, imported beverage products, which now dominate local shelves,” he said.
Despite the pressure, the group’s engagements with authorities appear to be yielding modest progress.
Additional tax assessments from Zimra declined slightly to US$13,14 million by year-end, down from US$13,39 million six months earlier.
However, assessments linked to associate entities remained unchanged at US$5,15 million.
Innscor has so far paid US$12,12 million under the “pay now, argue later” principle, with associate entities contributing a further US$4,93 million.
The group said it remains hopeful that continued dialogue will result in policy adjustments that promote fair competition and support the long-term viability of local manufacturing.
“The group remains hopeful that continued engagement with the authorities will result in appropriate policy refinements that support fair competition and, most importantly, ensure the long-term sustainability of the local beverage manufacturing sector, allowing local beverage products to dominate local shelves rather than imported products, as is currently the case,” Chinake said.
The tax pressures come as Innscor ramps up investment, with capital commitments exceeding US$62 million as of December 31, 2025, signalling confidence in growth across its diversified operations.
Strong cash generation supported this expansion drive, with operating cash flows rising 25,7% to US$87,4 million.
Cash and cash equivalents also increased to US$50,15 million, up from US$34,06 million six months earlier.
Chinake welcomed recent policy changes allowing the deductibility of intermediated money transfer tax in corporate tax calculations, describing the move as a positive step toward addressing distortions affecting compliant businesses.-newsda
