ZB FINANCIAL Holdings (ZBFH) recorded a 99% increase in its tax contributions to government in the 2024 financial year, reaching ZiG720,81 million, up from ZiG362,05 million the previous year.
The sharp rise was largely attributed to Intermediated Money Transfer Tax (IMTT) obligations, which accounted for 56,19% of the total tax paid.
The IMTT, introduced seven years ago as a 2% levy to strengthen government revenues, has become one of the most contentious tax measures in Zimbabwe.
The Bankers Association of Zimbabwe (BAZ) has consistently called for its reduction or removal, arguing that the tax encourages economic informality by driving transactions underground and leading to revenue leakages.
It has also been blamed for contributing to domestic price increases and exacerbating financial pressures on businesses operating in an already volatile economy.
According to ZBFH’s 2024 annual report, the impact of the IMTT was particularly stark, with payments under this tax category surging by 1,064.5% year-on-year to ZiG404,87 million.
“ZB Holdings contributes to the national fiscus through timely tax payments while ensuring full compliance with all applicable tax laws and obligations, including the timeous obtaining of tax clearance certificates,” ZBH said.
“This approach protects shareholder value and minimises operational tax risks.
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“The group proactively identifies and discloses any compliance gaps, whether internal or raised by external auditors, to avoid tax penalties and interest charges.
“However, we continuously monitor challenges such as high compliance costs, potential delays in certificate acquisition and risks of tax penalties, interest or payment discrepancies, both overpayment and underpayment,” it added.
The group employs a dedicated tax accountant to oversee daily tax matters and engages in half-yearly and annual external audits to ensure accuracy and transparency.
“To minimise risks, ZB Holdings employs a tax risk management methodology, ensuring compliance with statutory requirements and maintaining a document retention policy aligned with regulatory standards,” ZBFH added.
As part of its strategy, the group seeks advance tax rulings from the Zimbabwe Revenue Authority (Zimra) to clarify the tax implications of potential transactions, thereby ensuring certainty and timely compliance.
“We seek advance tax rulings from Zimra to confirm tax implications of potential transactions, ensuring clarity and certainty,” ZBH said. “We strictly adhere to all filing deadlines by submitting tax returns and making payments before their due dates.
“Any identified compliance gaps are disclosed voluntarily to maintain transparency and rectify issues on time.
“Stakeholder engagement is managed by the public officer, who fosters transparent relationships with revenue authorities, external advisors and industry bodies.
“The group resolves disputes constructively and withholds 30% tax on payments to suppliers without valid tax clearance certificates,” the group added.
The bank added that financial statements were published for transparency, and external tax advisors were consulted for complex transactions.
“ZB Financial Holdings generates its economic value through the provision of a diverse range of products and services,” it said.
“This value is then distributed to various stakeholders through tax contributions, dividend payments, and employee remunerations.”
Beyond IMTT, ZBFH made substantial contributions across other tax categories. These included corporate tax payments from subsidiaries amounting to ZiG67,5 million, Value Added Tax (VAT) of ZiG48,44 million, and Pay-As-You-Earn (PAYE) remittances of ZiG177,38 million on employee salaries.
The group also paid ZiG358,332 in domestic withholding tax, ZiG11,85 million in withholding tax on non-resident fees and royalties, ZiG5,32 million towards the Aids levy, and an additional ZiG5,06 million in various miscellaneous taxes.
In its first quarter trading update released last month, the financial group emphasised its ongoing commitment to developing value-added financial solutions.
“The group continues to focus on sustainable revenue generation, diversification of investment portfolio, and disciplined cost management to drive shareholder value in a dynamic operating environment,” ZBFH said.
Hence, the group is confident that the implementation of its sustainable revenue generation and cost optimisation strategies will sustain the group’s performance.
Exchange rate as at December 31, 2024: US$1:ZiG25,8.
