Delta contests Zimra US$73m tax assessments

DELTA Corporation Limited, a listed beverages giant, is contesting tax assessments issued by the Zimbabwe Revenue Authority (Zimra) totalling US$73 million.

The assessments, which cover principal tax, penalties, and interest for value-added tax (VAT) and income tax from 2019 to 2022, are being disputed due to Zimra’s failure to consider local currency payments made at the time.

According to Delta’s trading update for the quarter ended December 31, 2024, the assessments have a material impact on the group’s operations.

The company said adverse judgements have been made by both the High Court and the Supreme Court, although there are appeals and new cases at various stages in the courts, including the Constitutional Court and the Zimra appeals processes.

The company has already paid US$9,2 million in line with the “pay now, argue later” principle and pre-existing payment plans.

Delta expressed concerns over the ambiguities in tax legislation.

“The ambiguities in the tax legislation are pervasive, thereby creating risks of further disagreements in interpretations and application to current taxes,” it said.

The company holds a significant amount in Treasury Bills receivable from the Government, which could be considered in settling any tax liabilities.

The Delta management continues to engage with Zimra while appealing some legal and factual issues of the assessments and judgments.

Delta remains uncertain about the timing of the resolution but considers the current accounting treatment and disclosures of the assessments and amounts paid to be appropriate.-chrocnile