Online Reporter
Nelson Gahadza
Business Reporter
THE cumulative tax assessments raised by the Zimbabwe Revenue Authority against Delta Corporation and its associate, African Distillers, have risen to approximately US$97 million, the beverages maker said.
Delta is battling to resolve the long-running dispute over historical tax obligations and currency conversion methodologies.
The figure represents a US$24 million increase from the US$73 million reported last year, with the liability largely linked to the 2021 year of assessment.
Zimbabwe’s largest beverages company is contesting Zimra’s tax assessments on amounts the company argues should have been payable exclusively in foreign currency.
Delta maintains that the assessments do not adequately take into account local currency payments made at the time, whose value was subsequently eroded by inflation and currency depreciation.
The beverage maker has previously suffered legal setbacks after its challenges to the assessments were dismissed by the High Court, Supreme Court and Constitutional Court.
Delta argues that Zimra is retrospectively applying apportionment methods, particularly the turnover-ratio method, which the company says was not expressly provided for in law when the taxes became due.
On Value Added Tax (VAT), the group contends that the tax authority is relying on methodologies introduced through public notices rather than provisions directly contained in legislation.
Speaking after an analyst briefing for the financial year ended March 2026, Delta group chief executive Mr Matlhogonolo Valela said the company remained committed to constructive engagement with the tax authority in pursuit of a resolution.
“The arithmetic must be corrected, the methods must be corrected and we are engaged now. We are talking. We are correcting each other and where we are found at fault, we are happy to pay,” he said.
“Where we think that we are correct, we are showing Zimra what we have done and I believe, in the spirit of willingness to engage, we should find solutions. It is only a matter of time before we do.
“But the company must not be bankrupted by taxes because we can pay and stop doing everything else. It is unfortunate because, as an industry, we believe we are properly paying taxes.”
He said one of the key issues under discussion relates to the currency used in settling historical obligations and the mechanisms governing currency transitions.
“The question that is on the table is which currency and the currency transition mechanism,” Mr Valela said.
Delta maintains that it fulfilled all its tax obligations using the legal tender applicable at the time, at rates prescribed by law and based on the best available interpretation of the regulations then in force.
The company’s central grievance is that Zimra is re-indexing the United States dollar component of the assessments without equally recognising the value of taxes already paid in local currency during the same period.
The growing assessments have raised concerns within Zimbabwe’s corporate sector, with businesses warning that retrospective tax claims could negatively affect operations, investment planning and long-term sustainability.
Under Zimbabwe’s pay now, argue later principle, companies are required to settle disputed tax obligations upfront while contesting the assessments through legal or administrative channels.
Delta has already paid approximately US$18,7 million to Zimra under this arrangement.
The company argues that the resulting outflow of capital weakens working capital positions and constrains expansion plans.
Business leaders have also expressed concern that the re-indexation of historical liabilities, without adequately accounting for prior payments, undermines the legal principle of nominalism and creates a climate of prolonged tax uncertainty.
The dispute comes at a time when Treasury officials, including Finance, Economic Development and Investment Promotion Minister Mthuli Ncube and Permanent Secretary George Guvamatanga, have repeatedly encouraged dialogue and amicable engagement in resolving complex fiscal matters.
Delta said it is pursuing resolution through both the courts and direct engagements with Zimra and Treasury authorities.
The company is also pinning hopes on the application of Statutory Instrument 60 of 2024, which it believes could materially influence the outcome of the dispute if tax positions originally filed in local currency are correctly converted to ZiG and prior payments are fairly recognised.
Analysts say the eventual resolution of the Delta-Zimra dispute could establish an important precedent for Zimbabwe’s business environment, particularly regarding how authorities handle inter-currency tax obligations and historical tax settlements.
“The outcome could determine whether the Government adopts a fair-value inter-currency settlement framework or continues aggressive re-indexation practices that companies argue threaten the viability of compliant taxpayers,” said a capital markets analyst.
Meanwhile, Mr Valela said Delta was also engaging authorities over the impact of the sugar tax, which has significantly affected margins in the beverages segment.
“We are fully engaged with the authorities on sugar tax and we are hopeful that our engagement will deliver a solution.
“We are very clear that the sugar tax has affected margins, both in the cordials and sparkling beverages segments.
“We have somewhat absorbed the sugar tax. It is over US$30 million that we paid this year, but it cannot continue indefinitely,” he said.
Mr Valela said the company had adjusted its pricing architecture to cushion some of the pressure in the short term, but stressed that a sustainable long-term solution would require regional alignment on sugar taxation.
