Zimbabwe New Digital Tax Is Here - Here is What It Means for Online Payments

Zimbabwe’s 2026 National Budget introduced a significant change that will affect millions of everyday digital transactions. The government has moved to tax all foreign digital payments through a new 15% digital services withholding tax, collected locally at the point of payment.

On paper, the policy targets global digital platforms. In practice, it directly affects Zimbabweans paying for subscriptions, online ads, cloud services, and digital tools that power businesses, content creators, and freelancers.

How the new digital tax works

Under the new framework, banks and payment processors are now responsible for collecting the tax before money leaves Zimbabwe. This is a shift from the previous system, where foreign digital companies were expected to register for VAT and remit it themselves.

Instead of relying on offshore firms, the government now collects its tax instantly, every time a Zimbabwean makes a foreign digital payment.

This applies to services such as:

• Streaming platforms like Netflix and Spotify

• Digital advertising platforms like Facebook and Google

• Cloud and SaaS services

• Any online service paid to a foreign company

What a $100 online payment really costs now

One of the biggest changes is how much money a user now needs in their account to complete a payment.

A $100 foreign digital payment no longer requires just $100.

To succeed, your account now needs a minimum of $115, calculated as follows:

• $100 base payment

• 15% digital services tax: $15

That $115 figure does not include bank charges, card fees, or currency conversion costs, which means the real deduction will often be higher depending on your bank.

For many users, especially small businesses and freelancers who rely on foreign digital tools, this represents a noticeable increase in operating costs.

The double VAT risk no one has clarified yet

This is where the policy becomes complicated.

Zimbabwean users have already been paying tax on many foreign digital services. Platforms like Facebook, Spotify, Netflix, and Google already embed VAT into their pricing systems, meaning users are charged tax before the payment even reaches the bank.

If the current structure remains unchanged, Zimbabweans could end up paying VAT twice:

• Once inside the foreign platform’s billing system

• Again locally, when the bank withholds the new digital tax

At the time of writing, there is no clear public guidance on how this overlap will be handled.

The most likely outcome is that major platforms will eventually stop charging VAT within their systems for Zimbabwean users, allowing the tax to be collected only at the local payment level. But until that happens, uncertainty remains.

Why government prefers this model

From a government perspective, the change makes sense.

Under the old system, Zimbabwe depended on foreign companies voluntarily remitting VAT, a process that could take months or never happen at all. Enforcement across borders is difficult, slow, and expensive.

By shifting tax collection to local financial institutions, government:

• Gets revenue immediately

• Reduces reliance on offshore compliance

• Closes leakages in the digital economy

In short, it is a faster and more predictable way to collect tax in an increasingly digital world.

The risk of driving payments offshore

However, higher transaction costs often lead to unintended behaviour.

As digital payments become more expensive, there is a growing risk that users will shift to foreign-issued bank cards, particularly South African cards, to avoid the withholding tax entirely.

If a payment is processed outside Zimbabwe’s banking system, the tax cannot be deducted. This could:

• Push more transactions out of the local financial system

• Reduce volumes flowing through Zimbabwean banks

• Undermine long-term tax collection

Ironically, a policy designed to capture more digital revenue could encourage payment avoidance if costs become too high.

The bigger picture

Zimbabwe’s new digital tax reflects a global trend. Governments everywhere are struggling to fairly tax digital services that cross borders effortlessly.

The intention is clear: capture value from the digital economy. The execution, however, will determine whether the policy supports growth or quietly pushes users toward workarounds.

Clear communication, coordination with global platforms, and careful monitoring will be essential. Without that, Zimbabweans may simply feel that online payments have become more expensive without fully understanding why.

For now, one thing is certain: digital payments in Zimbabwe have entered a new, more costly era.