Legal Basis: The IMTT was introduced via the Finance Act and is codified in Section 36G of the Income Tax Act, with the operative rate specified in Section 22G of the Finance Act. It is sometimes informally called the “2% tax” and applies to electronic money transfers. Banks, mobile money providers, and financial institutions are required to collect this tax on transactions and remit it to the Zimbabwe Revenue Authority (ZIMRA).

Current Rates: As of 2026, the IMTT on transactions in Zimbabwean dollars (ZWL, now also denominated as “Zimbabwe Gold” currency) is 1.5% of the transfer amount. This is a reduction from the previous 2% rate in order to encourage use of the local currency. The tax on foreign-currency denominated transactions (such as USD transfers) remains 2%. In other words, for every dollar transferred electronically, USD $0.02 is payable as IMTT in the case of foreign currency transactions, and ZWL transfers are subject to 1.5% IMTT. Small transactions below a minimum threshold (historically around ZWL $~500 or USD $5) are exempt. Conversely, very large transactions are subject to a cap: any single transaction of US$500,000 or more attracts a flat IMTT of US$10,150 (approximately 2% of $500k) instead of a proportional 2%. This cap limits the absolute tax payable on high-value transfers.

Example: If an individual transfers ZWL 100,000 to another account, the IMTT would be ZWL 1,500 (1.5%). If instead they transfer an equivalent amount in USD (say US$200), the IMTT would be US$4 (2%). A company making a large payment of US$1,000,000 in a single transfer would not pay 2% of that amount (which would be $20,000); rather, it would pay the capped levy of $10,150. For a smaller USD transaction of, say, $1,000, the tax is $20. These examples illustrate the proportional nature of IMTT and the relief provided by the cap on very large transactions.

Treatment of Different Taxpayers: The IMTT is transaction-based, and liability does not depend on the taxpayer’s status as an individual or company, nor on residency. Both residents and non-residents incur IMTT whenever they transact through Zimbabwean financial systems (e.g. bank or mobile money transfers in Zimbabwe). However, certain transfers are exempt (for instance, transfers for government, or specified humanitarian payments), and financial institutions themselves are generally exempt when moving their own funds. Importantly, the IMTT is collected at the point of transaction by the intermediary (the bank, mobile money provider, etc.), so neither individuals nor companies need to file a separate return for it – the duty of compliance (calculation and remittance) rests on the financial institutions. From 2025 onward, the law was amended to allow businesses to deduct IMTT as an expense for income tax purposes, recognizing it as a cost of doing business. This means compliant taxpayers can write off the IMTT paid on their transactions when computing taxable income, offering some relief.

Compliance: There is no direct filing requirement for IMTT by the transacting public; instead, banks and mobile money operators automatically levy the tax and remit it to ZIMRA on a daily or periodic basis as prescribed. Taxpayers should be aware of the charge and factor it into transaction costs. If an IMTT liability was somehow under-collected, ZIMRA could recover it from the financial intermediary or, less commonly, from the transacting parties. Generally, though, the system is designed to be seamless for the user. In summary, IMTT is a broad-based levy on electronic money movements, set at 1.5% for local currency and 2% for foreign currency transactions, with a high-value cap, and it is administered via financial intermediaries rather than through taxpayer-filed returns.

Legal Basis: Presumptive taxes in Zimbabwe are provided for in Section 36C of the Income Tax Act, and the rates/amounts are defined in Section 22C of the Finance Act. Presumptive tax is a simplified tax regime targeting the informal sector and certain small-scale business activities that may not be registered for standard income tax. The Finance Act (No.2) 2005 introduced these taxes, and they have been updated several times (most recently by the Finance Act 2024) to adjust rates and categories. The presumptive tax serves as a substitute for income tax for those targeted activities – it is usually a fixed amount or percentage that approximates tax on income, applied in lieu of requiring detailed accounting of actual income and expenses.

Applicable Rates and Categories: Presumptive tax rates vary by the type of trade or asset. The current rates (denominated in USD for reference, but payable in ZWL at the prevailing rate) for key categories are as follows:

Informal traders (general): 10% of monthly rental of the premises/stall they operate from. For example, a market vendor renting a stall for $200 per month would owe $20 per month in presumptive tax.

Small-scale miners: 0% – currently exempt. The presumptive tax on precious mineral sales was reduced to zero to encourage gold and gemstone deliveries through official channels. (Small-scale miners still pay mining royalties and other fees, but no presumptive income tax on the sales of minerals.)

Passenger transport operators: Fixed USD amounts per vehicle, per month, based on carrying capacity. For instance: a taxicab (up to 7 passengers) owes US$35 per month; a minibus (8–14 seats) owes US$50 per month; 15–24 seater minibuses owe US$60; 25–36 seater buses owe US$80; and large buses (over 36 passengers) owe US$100 per month. So a commuter omnibus with 15 seats would incur $60 each month (i.e. $720 for a full year) as presumptive tax.

Goods transport operators (trucks): US$200 per month for heavy trucks over 10 tonne capacity; heavy combinations or trucks over 20 tonnes pay up to US$500 per month. (In practice, $500 covers large haulage trucks, including those with trailers exceeding 15 tonne combined capacity.)

Driving schools: US$50 per month if only training class 4 (light vehicle) drivers, or US$100 per month if training class 1 and 2 (heavy vehicle) drivers.

Hairdressing salons: US$5 per chair per month. For example, a small salon with 4 chairs/stations pays $20 monthly.

Informal cross-border traders: 20% of the value for duty purposes of the commercial goods being imported. (This essentially serves as an import-stage tax on those bringing in goods for resale without formal business registration. It is collected by ZIMRA at the border on importation of goods by cross-border vendors.)

Cottage industry operators: (small manufacturers or artisans operating from home or informal premises): US$100 per month.

Others: There are also presumptive taxes for operators of commercial boats (tourist cruise boats, fishing rigs – ranging roughly from US$30 to US$100 per month depending on vessel size), as well as for beauty parlors/spas (US$100 per month), gymnasiums (US$100 per month), and butcheries (small butcher shops, US$50 per month).

(Note: The above USD amounts are converted to ZWL at the official exchange rate when payment is made. The law often pegs them in USD to maintain value, given local inflation. ZIMRA publishes the ZWL equivalents periodically.)

Examples: Suppose an individual operates an unregistered driving school teaching only class 4 drivers. They would pay US$50 each month as presumptive tax, regardless of their actual profits. If another taxpayer runs a small commuter bus (18-seater), the monthly presumptive tax is US$60. No matter if the bus makes $500 or $5,000 that month in revenue, the tax is fixed at $60. Similarly, a vendor at Mupedzanhamo market paying $100 monthly rent for a stall owes a $10 presumptive tax (10%). These fixed or formula-based amounts simplify compliance for small operators and ensure a minimum tax contribution.

Individuals vs Companies & Exemptions: Presumptive taxes are generally intended for informal sector individuals or entities that are not registered for normal income tax. In practice, even a small company (e.g. a micro-company operating a commuter minibus) could fall under presumptive tax if it hasn’t registered for corporate tax. The key factor is the absence of an Income Tax clearance. Tax-compliant businesses with a valid tax clearance (ITF 263) are usually exempt from presumptive tax – for example, a transport operator who is registered for income tax and regularly filing returns would present their tax clearance certificate and would not be charged presumptive tax on vehicle licenses or at border posts. The presumptive regime is thus a backstop to capture revenue from those outside the formal tax net. There was also a special category for self-employed professionals (doctors, lawyers, engineers, etc.) who could opt into a presumptive tax called “Self-Employed Professionals’ Tax.” However, recent reforms have phased out that option – such professionals are now required to file normal income tax returns (those who had opted in were allowed to continue only until 1 January 2025). Going forward, all professionals must be in the standard tax system.

Compliance and Filing: Payment of presumptive taxes is often collected at source or upon periodic licensing: e.g. ZIMRA coordinates with authorities so that one must pay presumptive tax when renewing vehicle licenses for buses or trucks, or at borders when importing goods, etc. Informal traders might be organized by local authorities who collect rents (though compliance in that segment is challenging). Every person liable to presumptive tax is required to pay the fixed amount quarterly or monthly as prescribed, usually without the need for an annual return for that income. There is no complex filing – the tax is simply a set amount. However, if such a taxpayer has other income outside presumptive categories, or if they wish to transition to the formal tax system, they would then be expected to file returns. In summary, presumptive taxes provide a simplified, fixed approach to taxing small-scale businesses, ensuring contribution to the fiscus with minimal administrative burden.

Legal Basis: A special withholding tax on commissions is imposed by Section 36I of the Income Tax Act, with the rate set by Section 22I of the Finance Act. This tax applies to certain commission payments, specifically in the insurance and property sectors. It was introduced to bring freelance agents and brokers into the tax net. The law requires the payer of the commission (for example, an insurance company or an estate agency/client paying a property brokerage fee) to withhold a percentage as tax and remit it to ZIMRA.

Rate: The rate is 20% of the gross commission paid. This has been the rate since its introduction in 2005, and it applies uniformly. In other words, one fifth of any commission on insurance premiums or property sale/rental is taken as tax at source. The Thirty-Second Schedule to the Income Tax Act specifies the mechanics, and the tax is often referred to as “Commissioners’ WHT” in practice.

Application: This tax primarily targets freelance or independent agents/brokers who are not on an employer’s payroll. For instance, if an insurance company pays commission to a freelance insurance agent (not an employee) for bringing in a client, the company must deduct 20% and send it to ZIMRA. The same concept applies for property commissions (e.g., if a person sells a house and pays a commission to an unincorporated estate agent or a broker without tax clearance). Example: Suppose Insurer XYZ Ltd owes a commission of \$1,000 to an independent agent for selling a policy. The insurer will withhold \$200 (20%) and pay the agent \$800, while \$200 is remitted as tax. ZIMRA requires this to be done by the 10th of the month following payment, and the insurer must file a REV5 withholding tax return detailing the amounts. A certificate is given to the agent showing the gross commission and tax withheld.

Individuals vs Companies: The 20% commission tax is levied on commissions paid to both residents and non-residents, as long as the recipient isn’t an employee on PAYE. In practice, most freelance agents are individuals. If the commission is paid to a company (e.g. a brokerage firm) and that company has a valid tax clearance, the withholding may not be required, since the company is expected to account for the income in its normal tax return. However, absent proof of tax registration, the payer will err on the side of withholding. Notably, if an insurance agent or broker is a salaried employee of the company (i.e. on payroll), their commission would be subject to PAYE, not this 20% tax. The commission tax is specifically to capture those earnings that would otherwise escape PAYE or income tax (often side commissions, brokers who are not employees, etc.). For non-resident agents receiving commission from Zimbabwe (for example, a foreign reinsurance broker earning commission on Zimbabwe business), the same 20% could technically apply; however, such scenarios might also overlap with Non-Resident Tax on Fees. (In general, whichever specific provision covers the payment would be applied – the property/insurance commission tax is a distinct category intended mostly for the domestic context.)

After-Tax Treatment: The 20% withheld is considered a final tax on that commission if the recipient is not formally in the tax system. However, if the agent later files an income tax return (say, they have other income or choose to regularize their taxes), the withheld amount can be claimed as a tax credit against their tax liability. For example, an insurance agent who had $2,000 in commissions with $400 withheld during the year could file a return declaring the $2,000 as income, deduct business expenses, and use the $400 as prepaid tax. In the absence of a return, ZIMRA simply keeps the 20% as the final tax on that income.

Compliance: The obligation to withhold and remit lies with the payer of the commission (insurance companies, insurance brokers paying sub-agents, real estate clients or agencies, etc.). They must remit the tax by the 10th of the next month and file the accompanying return. Failure to withhold makes the payer liable for the tax. From the recipient’s perspective, there is no action required if that is their only income – the tax has been paid on their behalf. If they are registered, they need to account for the income and can use the credit as noted. ZIMRA actively monitors industries like insurance to ensure compliance (public notices have been issued reminding insurers of this duty). In summary, the Property/Insurance Commission Tax is a 20% withholding mechanism to ensure that commission earnings do not go untaxed; it affects mainly independent agents, with the paying companies acting as withholding agents.

Legal Basis: The tobacco levy is provided for by Section 36A of the Income Tax Act, with details in the Twenty-Fourth Schedule of that Act, and it is enabled through Section 22A of the Finance Act. This levy was introduced to tax the lucrative tobacco trade, one of Zimbabwe’s key industries, and has been adjusted a few times. The current framework was reinstated effective 2015 (after a temporary suspension for sellers) and continues to apply up to 2025/26.

Who is Liable and Rates: The levy is charged on each sale of tobacco and is split between buyers and sellers of the tobacco:

Buyers of auction or contract tobacco: pay 1.5 cents per dollar of the purchase price (which is effectively 1.5% of the tobacco price). The “buyer” here typically means the tobacco merchant or company purchasing tobacco leaf at auction floors or via contract farming arrangements.

Sellers of auction or contract tobacco (growers): pay 0.75 cents per dollar, i.e. 0.75% of the sale price. The “seller” is the tobacco grower – for example, a farmer who brings tobacco to the auction or delivers under contract.

These rates have been in place since 2015, when the levy on sellers was reintroduced at 0.75% (half the buyer’s rate). Essentially, the buyer pays twice the rate of the farmer. Both are calculated on the gross tobacco price.

Collection Mechanism: The levy is withheld at the point of sale. According to the law, it must be withheld and paid over in accordance with the Twenty-Fourth Schedule. In practice, at auction floors, the Tobacco Industry and Marketing Board (TIMB) or the auction house will withhold 0.75% from the proceeds due to the farmer, and add a 1.5% charge to the invoice of the buyer, then remit both amounts to ZIMRA. In contract sales, the contracting company (buyer) will typically handle the withholding from the farmer’s payment as well as account for its portion.

Example: A farmer sells a bale of tobacco for US$1,000 at the auction. The tobacco levy on this transaction will be US$15 from the buyer and US$7.50 from the seller. The farmer would effectively receive US$992.50 after the levy (and other charges) are deducted, and the buyer company would pay US$1,015 in total (of which US$15 is the levy to ZIMRA). ZIMRA thus collects $22.50 in total from that sale. These levies go to the Consolidated Revenue Fund, though there have been policy discussions to use them for tobacco sector support.

Individuals vs Companies: In tobacco levy terms, the distinction is more about role (buyer vs seller) than the nature of the entity. Most tobacco sellers are individual farmers or farming entities, and most buyers are corporations (including local companies and foreign-owned merchants). Regardless, all sellers pay 0.75% and all buyers pay 1.5% on each transaction – the law does not differentiate further by residency or incorporation. Notably, non-resident buyers (if any purchase tobacco directly for export) would also be subject to the 1.5% levy when they purchase Zimbabwean tobacco; however, typically foreign firms operate through local subsidiaries or agents who handle the tax. The tobacco levy is deductible for income tax purposes as a business expense (it’s a cost on the buyer’s part, and for the farmer it reduces the income received, which means effectively only net is taxed as income).

Compliance: Compliance is high because the levy is collected at structured sales points. The TIMB oversees the auction and contract sales system, and it works with ZIMRA to ensure the levy is remitted. Farmers do not need to file anything separate for this levy – it’s auto-deducted. Buyers similarly just include the levy payment in their tax compliance. The law holds the licensed buyers/auctioneers responsible for remitting the levy to ZIMRA. Failure to do so could result in penalties or jeopardize their licensing. In sum, the tobacco levy is a straightforward percentage-based charge on tobacco sales, split between buyer and seller, and is handled via withholding at the marketplace.

Legal Basis: Zimbabwe’s carbon tax was introduced as an environmental levy under Section 36E of the Income Tax Act, with details in Section 22E of the Finance Act. It was first implemented in the early 2000s and has been updated to align with multi-currency regime changes. The tax is essentially on fossil fuels (petroleum products) and on vehicle emissions, aimed at compensating for environmental costs.

Rates: The carbon tax on fuel is a hybrid levy – it is calculated as US$0.04 per liter or 5% of the cost, insurance & freight (CIF) value of the fuel, whichever is higher. This rate applies to both petrol and diesel fuel imported into Zimbabwe. In other words, for each liter of fuel imported, the importer must pay at least 4 US cents, but if 5% of the import value of that liter exceeds $0.04, then the higher amount is due. This mechanism ensures the tax keeps pace with fuel price increases: when fuel prices rise, 5% of value will exceed 4 cents, so the tax effectively becomes ad valorem; when prices are low, a minimum specific tax of 4c/L is still collected. In addition to fuel imports, visitors driving foreign-registered vehicles are subject to a carbon tax upon entry. A motorist entering Zimbabwe with a non-Zimbabwean registered car must pay US$10 per vehicle for every 30-day period (or part thereof) they stay in the country. This is a flat environmental charge for the emissions that vehicle will produce while in Zimbabwe.

Application and Examples: The primary payers of carbon tax are fuel importers – which in Zimbabwe includes oil companies and anyone licensed to import fuel in bulk. For example, if an oil company imports 10,000 liters of petrol with a CIF value of $8,000 (i.e. $0.80 per liter), 5% of $8,000 is $400, while $0.04 per liter would be $400 as well – so in this case both methods coincide and the tax is $400. If the fuel were very cheap (say $0.50/L CIF), 10,000 liters would be $5,000 value and 5% of that is $250, whereas $0.04/L would be $400; since the tax is the greater of the two, the company would still pay $400 (ensuring a minimum floor to the levy). Conversely, if fuel prices rise to $1.50/L, then 10,000 L = $15,000, 5% of which is $750, vs $400 at 4c/L; the tax would then be $750. Thus, the effective rate floats between 4% and 5% of the fuel cost in these examples. Now for a visiting foreign vehicle: suppose a Botswana-registered car comes into Zimbabwe for a two-week vacation. At the border, the driver pays US$10 carbon tax which covers up to one month. If they exit and re-enter later, they’d pay again for a new period. This $10 flat fee is simple and contributes to environmental funds.

Individuals vs Companies: Fuel importers are usually companies (or parastatals), and they bear the cost initially, which is then passed on in the pump price to end consumers. There’s no difference in rate by type of importer – all pay the same $0.04 or 5% formula. For the vehicle carbon tax, it specifically targets individuals driving personal or commercial vehicles from outside Zimbabwe. Zimbabwean-registered vehicles do not pay this $10 at the border (they instead indirectly pay via fuel purchase carbon taxes). Foreign tourists or transporters pay the $10/month per vehicle; this obviously affects non-residents more (as they bring vehicles in), but any Zimbabwean resident who happens to drive a foreign-plated car into the country would also have to pay. There is no reduction or exemption based on vehicle type (the law doesn’t differentiate between a small car or a heavy truck – $10 per vehicle per month is the rule for visitors, making it a modest charge in many cases).

Compliance: Carbon tax on fuel is collected by ZIMRA at the point of fuel importation – much like customs/excise duties. Importers file entries and pay the tax alongside duties when fuel enters the country. ZIMRA closely monitors bulk fuel imports, so compliance is enforced at ports of entry (road, pipeline, etc.). For the vehicle carbon tax, ZIMRA (or its agents at border posts) collect the $10 fee and issue a carbon tax certificate or receipt which is valid for the period. Failure to pay (for instance, sneaking in or overstaying the period without renewal) can result in penalties if caught. Generally, the system is straightforward: if you’re importing fuel or a foreign vehicle, you pay upfront. The funds collected historically were earmarked for environmental protection programs (though they go into general revenue today). In summary, the carbon tax is an environmental levy on fuel usage, implemented through import stage taxation on fuel and an entry fee for foreign vehicles, and it applies uniformly without distinction among taxpayers.

Legal Basis: Zimbabwe imposes taxes on gambling under Section 36L of the Income Tax Act, with the rates set out in Section 22M of the Finance Act. Often simply called “bookmakers’ tax” and “punters’ tax,” these were introduced in 2018 and significantly revised in late 2024 to take effect in 2025. They target the betting industry: one tax on the betting company’s revenues, and another on gamblers’ winnings. The Betting and Totalizator Control Act [Chapter 10:02] provides the licensing framework for bookmakers, but the tax itself is administered by ZIMRA through the Finance Act provisions.

Rates (after 2025 reform): Starting 1 January 2025, the bookmaker’s tax is 20% of the bookmaker’s gross revenue from betting operations. (Previously it was 3%, so this is a substantial increase.) Gross revenue, in this context, can be interpreted as the bookmaker’s “gross takings” or total bets received minus payouts, depending on how regulations define it. The intention, however, is to tax the overall turnover of the bookmaker at a high rate to ensure meaningful contribution. Meanwhile, the punters’ tax (withholding on gamblers’ winnings) was raised from 10% to 25% of the punter’s winnings. This means when a customer wins a bet, 25% of the net win (the profit portion of the payout, excluding the original stake) is withheld as tax. These rates align Zimbabwe’s betting taxes more with international norms for sin taxes, albeit on the higher side for punters.

How It Works: For bookmakers (the companies) – typically sports betting companies or licensed bookmakers at racecourses – the 20% tax on gross revenue is generally treated as a final tax on their betting income. For example, if in a given month a betting company took in $100,000 in bets and paid out $80,000 in winnings, its gross profit (gross takings) is $20,000. A 20% bookmaker’s tax would amount to $4,000, which the company must pay to ZIMRA. This $4,000 is in addition to any other taxes (like VAT on betting, if applicable) but likely replaces income tax on the betting profit – since it’s a final tax on that stream, the bookmaker wouldn’t again pay corporate income tax on the $20,000 profit from betting (to avoid double taxation). For punters (individual bettors), whenever a bet is successful, the operator withholds 25% of the win. For instance, if a punter stakes $10 and wins $100 (a $90 profit), the bookmaker will pay the punter $67.50 and withhold $22.50 as tax (which is 25% of $90). If a punter’s win is, say, $1000, they only receive $750 net after $250 tax. This punter’s tax also applies to lottery winnings and any licensed gambling pay-outs – it’s not limited to sports bets.

Individuals vs Companies: The bookmaker’s tax is borne by the company (or individual if an individual is licensed as a bookmaker). It does not matter whether the bookmaker is locally owned or foreign-owned – any licensed operator in Zimbabwe pays 20% on their betting revenue. Since it’s a final withholding-type tax, it simplifies compliance for companies (though if the bookmaker is a company, it still files returns but excludes that income or claims it as already taxed). The punter’s tax squarely falls on individuals (the gamblers). If a corporate entity were betting (not common, but say a betting syndicate company), the tax would still be withheld on winnings at 25%. Both residents and visiting non-residents who gamble in Zimbabwe are subject to the same punters’ tax – a tourist who wins at a local casino or sportsbook will have 25% withheld just like a local would. There are generally no exemptions; however, very small winnings might not practically be taxed (administratively, if someone wins $5, typically tax might not be deducted if below certain thresholds, though the law has no minimum stated). The increase to 25% on winnings means Zimbabwe punters now lose a quarter of any prize to taxes, which is high and possibly aimed at discouraging excessive gambling or raising revenue from those activities.

Compliance: Bookmakers must file monthly or quarterly returns of their gross takings and pay the 20% tax to ZIMRA. Since they are licensed entities, compliance is enforced through oversight – failure to pay taxes could jeopardize their license. The punters’ tax is collected on the spot by the bookmaker/casino at payout time, which then reports and remits these amounts to ZIMRA, typically along with the bookmaker’s tax returns. The law now clearly states the bookmaker’s tax is a final tax and significantly increased, so accounting systems in the industry were adjusted accordingly in 2025. For bettors, the tax is essentially invisible beyond receiving only net winnings – they have no further obligation (they don’t need to declare betting wins in their income tax returns, since the tax is final and withheld). From ZIMRA’s perspective, audits can compare total betting volumes to taxes paid to ensure 20%/25% was properly computed. It’s worth noting that prior to 2025, different rates applied (3% and 10%), and there were detailed rules (for example, separate rates for different types of betting like horse racing vs other sports in older schedules). The 2025 Finance Act simplifications override those with a flat 20% and 25% across the board, making it easier to administer. In summary, the Bookmakers and Punters taxes heavily tax the gambling sector: bookmakers effectively pay a turnover tax on bets, and winners pay a quarter of their prize, with the taxes withheld and remitted by the operators.

Legal Basis: The demutualisation levy is a somewhat specialized tax introduced by Section 36D of the Income Tax Act and implemented via Section 22D of the Finance Act. It was created around 2000 when some insurance companies and building societies were converting from mutual ownership (owned by policyholders or members) to corporate shareholder ownership – a process known as demutualisation. The levy is aimed at taxing the one-time windfall gains that members of a mutual entity receive when it demutualises.

Rate and Base: The levy is 2.5% of the nominal value of the demutualisation benefit accruing to each member. In other words, when a mutual society or insurance company demutualises, each member (policyholder or depositor, depending on the case) might receive shares in the new company or a cash payout as compensation for their relinquishment of mutual ownership. The law imposes a 2.5% tax on that entitlement. The “amount upon which the levy is payable” is defined in the Twenty-Seventh Schedule of the Act – essentially it’s the value of shares or cash each member gets during demutualisation. Only Zimbabwean members are subject to this levy; non-Zimbabwean members of the mutual society would not be charged (since the Zimbabwe tax jurisdiction covers benefits accruing to locals).

Example: Suppose a mutual life insurance company in Zimbabwe demutualises and in the process, each policyholder is given 1,000 shares in the new company, worth US$0.50 each (so $500 total value). A Zimbabwean policyholder would incur a demutualisation levy of 2.5% of $500, which is $12.50. If another member receives a $2,000 cash payment as their share of the mutual’s retained earnings, they would pay $50 in levy. The company (or scheme administrator) would likely deduct this amount or require it to be paid before the member receives their full shares/cash. In the demutualisation of Old Mutual in 1999-2000, for instance, such a levy was applied to the benefits allocated to Zimbabwean members (Old Mutual was a mutual insurance society originally).

Individuals vs Companies: In demutualisations, the members are usually individuals (policyholders, account holders). Sometimes a company can be a member of a mutual (e.g. a corporate policyholder), in which case if it’s Zimbabwe-based, it would also pay 2.5% on the benefit. The crucial distinction is residency: Zimbabwean members pay 2.5%, foreign members do not. “Zimbabwean member” would typically mean a member whose address or status is in Zimbabwe (or however the company determines residency). So a local individual or company doesn’t get to avoid it – even companies will be treated as “members” if they held policies, etc. There’s no further differentiation like size of member or amount; the flat 2.5% applies uniformly on whatever each gets. Note that this levy is one-time per event – it’s not an annual tax or recurring charge.

Compliance: The demutualisation levy is somewhat unique in that it occurs only when a mutual conversion happens. The mutual society (or the successor company) is responsible for withholding and remitting the levy to ZIMRA. Typically, as part of the demutualisation plan, the company will either subtract the levy from any cash distribution or, if distributing shares, might require members to pay the levy in cash or sell a small portion of shares to cover it. The Twenty-Seventh Schedule outlines that the levy should be collected by the company and paid to ZIMRA within a specified time after the demutualisation date. From the member’s perspective, this tax is automatically handled; they might just see that they got slightly fewer shares or a slightly reduced cash amount. If a member were to receive their full allocation without withholding (unlikely), they would then be personally liable to pay the 2.5%, but in practice the company orchestrating the demutualisation handles it to ensure compliance. ZIMRA coordinates closely when such corporate events occur. Since demutualisations are rare (and require governmental and regulatory approvals), the levy is infrequently applied, but it remains on the books for any future cases. In summary, the demutualisation levy is a one-off tax of 2.5% on the benefits from converting a mutual entity to a company, applicable to Zimbabwean members only, and it’s usually collected by the entity during the conversion process.

Conclusion: The above levies represent “Other Income-Based Levies” in Zimbabwe – so called because they are taxed on income streams or transaction values outside the normal corporate or personal income tax. Each is grounded in statute and kept up-to-date via Finance Acts. Both individuals and companies may be affected, directly or indirectly, and in some cases special treatment for residents vs non-residents is specified (e.g. demutualisation levy, or withholding taxes). Compliance is generally achieved through withholding mechanisms or indirect collection, reducing the burden on the taxpayer to file. For a tax professional or student, understanding these levies is crucial, as they frequently arise in practical scenarios: from everyday mobile money transfers (IMTT), operating a transport business (presumptive tax), earning insurance commissions, selling tobacco, importing fuel, running a betting shop, to once-in-a-generation events like demutualisations. Mastery of their rates and rules, as detailed in this lesson, is essential for anyone dealing with Zimbabwean tax law in 2025/26.