BEVERAGE maker, Delta Corporation Limited (Delta) faces a staggering US$329 million tax bill for its financial year ended March 31, 2025, if it loses court appeals against US$74,8 million in additional tax assessments made by the Zimbabwe Revenue Authority (Zimra).
As first reported by NewsDay Business in January, the paper estimated that the beverage maker could end up paying more than US$250 million in taxes for its financial year ended March 31, 2025.
These taxes included additional tax assessments by Zimra over exchange rate conversions, the US$0,001 sugar tax per gramme contained in beverages, value-added tax
(VAT), excise duties and income tax.
Many firms have complained that Zimra’s taxes are now weighing down firms by adding significant increases in overall costs, with Delta being the biggest listed firm.
In an analyst briefing for the financial year ended March 31, 2025, Delta management presented their tax burden for shareholders.
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Delta disclosed US$254,15 million in confirmed taxes, comprising US$230,35 million in indirect taxes — including VAT, excise duties and the sugar tax — and US$23,8 million in income tax.
The indirect taxes and income tax are increases of 19% and 516,52%, respectively, from the prior year.
Further, it recorded an additional tax assessment of US$74,8 million, which the firm is appealing.
Altogether, these tax burdens add up to US$329 million.
“Disputes over tax liabilities and exchange rate policies introduce financial uncertainties,” Delta chief executive officer Matlhogonolo Valela said during the presentation.
He revealed that the company was making continued engagements with the authorities to achieve fair and sustainable solutions.
As a result of these tax burdens, the firm had adjusted the prices of its products, leading to revenue of US$807,47 million for the period under review, up 5% from the prior year.
“This reflects the volume growth in Lager Beer and the sugar tax induced price increases in sparkling beverages,” Delta chairman Todd Moyo said in a statement attached to the firm’s financial year report for the period ended March 31, 2025.
“The proportion of domestic sales undertaken in foreign currency was around 80% for most of the year although there were periodic shifts in response to the performance of the formal retail sector which was affected by exchange rate disparities and the level of enforcement of the dual pricing regulations.”
This increase plus a 70,33% narrowing in exchange losses to US$12,32 million for the period under review, from the prior year, led to a profit after tax of US$116,14 million.
The profit after tax was an increase of 16% over the prior year.
“The company is contesting the tax assessments issued by the Zimbabwe Revenue Authority for amounts that they consider to have been payable exclusively in foreign currency,” Delta said.
“Additional assessments were received in November 2024 adding to those assessed in 2022, to bring the disputed amount to US$74,8 million (2024: US$54,8 million), which covers principal tax, penalties and interest for value added tax and income tax for periods 2019 to 2022.”
Delta argues that the assessments do not consider the local currency payments made at the relevant time, which have since been debased through inflation and currency depreciation.
“Adverse judgments 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,” Delta said.
The group reportedly paid a total of US$11,4 million as of March 31, 2025, in line with the “pay now, argue later” principle and pre-existing payment plans.
The firm indicated that it might use its significant Treasury Bills that it held from the government in the settlement of any tax liabilities that may finally be determined.
