Fidelis Munyoro
Chief Court Reporter
Mimosa Mining Company has suffered a major legal setback after the High Court dismissed its urgent application to stop the Zimbabwe Revenue Authority (Zimra) from collecting nearly US$2,8 million in disputed taxes.
The ruling paves the way for the tax collector to pursue recovery measures against the mining giant’s bank accounts and any refunds due to it.
The judgment, delivered by Justice Joseph Chilimbe in the Commercial Division of the High Court, also reinforces the principle that taxpayers cannot automatically suspend tax collection by challenging assessments, with the statutory obligation to pay remaining in force while objections and appeals are being pursued.
Mimosa, which operates one of Zimbabwe’s major platinum group metals mining ventures in Zvishavane, had approached the court seeking an interdict to prevent Zimra from garnisheeing its accounts held with Ecobank Zimbabwe, Nedbank Zimbabwe and FBC Bank.
The dispute centres on value added tax on imported services (VATIS) for the period January 2020 to June 2025.
Zimra assessed Mimosa for US$2 779 986,19, comprising US$1 865 997,55 in principal tax, US$373 199,51 in penalties and US$540 789,13 in interest.
The platinum mining company challenged the assessments, arguing that they were unlawful and that Zimra was effectively resurrecting tax liabilities extinguished by an earlier consent order granted by Justice Jacob Manzunzu in November 2025.
Under that order, Zimra had agreed to withdraw the previous assessments and cancel and expunge the associated principal tax, penalties and interest.
Mimosa maintained that the subsequent assessments issued on July 3, 2026, related to the same tax review and infractions and therefore violated the earlier court order.
However, Zimra argued that the withdrawal of the previous assessments did not prevent it from exercising its statutory powers to issue fresh assessments and collect outstanding revenue.
In his ruling, Justice Joseph Chilimbe in the Commercial Division of the High Court, acknowledged the significance of the earlier consent order, observing that it was binding and could not simply be disregarded.
The judge said: “Before me is a court order whose terms on the face of it are most explicit. It issues certain directives to, and is binding, not against the applicant, but the first respondent.”
The court also found that Mimosa had established a prima facie right warranting consideration of interim protection, particularly given the circumstances surrounding the earlier withdrawal of assessments and Zimra’s subsequent correspondence confirming the extinguishment of the liabilities.
However, the mining company’s application ultimately failed on the crucial requirement of demonstrating irreparable harm.
Mimosa argued that the recovery of the disputed amount would disrupt its mining operations, affecting its ability to meet payroll, supplier, contractor and statutory obligations.
But the judge found that the company’s evidence was insufficiently detailed to demonstrate the actual commercial consequences of the proposed deductions.
Justice Chilimbe remarked that the company’s corporate finance manager, Tapiwa Chisango, needed to provide a clearer picture of the anticipated financial disruption.
“I am not satisfied that the applicant made out a sufficient case on irreparable harm likely to ensue if the assessments are implemented,” the judge ruled.
The court further noted that any excess payments could be refunded if Mimosa ultimately succeeded in its objection or appeal, weakening its argument that the threatened recovery would cause irreparable prejudice.
Importantly, the judgment underscores the reach of section 36 of the Value Added Tax Act, which provides that an objection or appeal does not, unless the Commissioner directs otherwise, suspend the obligation to pay tax or Zimra’s right to recover it.
Section 48 empowers the Commissioner to appoint third parties, including banks, as agents to recover tax from money held for or owed to a taxpayer.
Justice Chilimbe also stressed the public interest in revenue collection, finding that the principle of paying first and disputing the assessment afterwards carried considerable weight in the circumstances.
The ruling does not, however, finally determine whether Zimra’s July 2026 assessments were legally valid or whether they breached the earlier consent order. Mimosa’s objection under section 32 of the VAT Act remained pending before the Commissioner General.
The judgment, therefore, leaves the substantive tax dispute unresolved while allowing Zimra to proceed with its statutory recovery powers.
In dismissing the application with costs, the court delivered a significant reminder to businesses that challenging a tax assessment is not, by itself, a shield against collection.
For major taxpayers, the decision also highlights the importance of placing concrete financial evidence before the courts when seeking urgent protection against revenue recovery measures.
