Understanding VAT Categories in Zimbabwe
Value Added Tax (VAT) in Zimbabwe is governed by the Value Added Tax Act [Chapter 23:12] and administered by ZIMRA. All goods and services supplied in Zimbabwe fall into one of three categories, each with different VAT treatment. Understanding which category your goods or services fall into is essential for correct pricing, invoicing, and tax compliance.
The three VAT categories are:
| Category | VAT Rate | Input VAT Claim | Description |
|---|
| Category A | 15% | Yes | Standard rated — most goods and services |
| Category B | 0% | Yes | Zero-rated — essential goods, exports |
| Category C | Exempt | No | Exempt supplies — financial, medical, educational |
The critical difference between zero-rated and exempt is the ability to claim input VAT. Zero-rated suppliers can reclaim VAT paid on their purchases (inputs), while exempt suppliers cannot. This has a significant impact on business costs and pricing.
Category A — Standard Rated Supplies (15%)
Category A is the default VAT category. Any supply of goods or services that is not specifically zero-rated or exempt falls into Category A and is subject to VAT at 15%.
Businesses registered for VAT must charge 15% VAT on all Category A supplies and can claim input VAT on their purchases related to making taxable supplies.
Common Category A (15% VAT) Items
- General retail goods: Clothing, footwear, electronics, furniture, appliances
- Professional services: Legal, accounting, consulting, marketing, IT services
- Telecommunications: Airtime, data bundles, internet services, phone handsets
- Construction: Building materials, construction services, plumbing, electrical
- Motor vehicles: New and used cars, spare parts, repairs and servicing
- Restaurant and catering: Prepared food, takeaway meals, catering services
- Alcohol and tobacco: Beer, spirits, wine, cigarettes (also subject to excise duty)
- Entertainment: Cinema, events, sports, gaming
- Stationery: Office supplies, printing, packaging materials
- Transport: Domestic air travel, car hire, courier services
- Accommodation: Hotels, lodges, bed and breakfast, Airbnb
- Software and digital services: Software licences, cloud services, subscriptions
- Security services: Guarding, alarm systems, CCTV
- Cleaning and pest control: Commercial cleaning, fumigation
- Advertising and media: Print advertising, online advertising, media placement
Pricing Note: When displaying prices to consumers in Zimbabwe, the price should include VAT (VAT-inclusive pricing). Business-to-business invoices typically show the VAT amount separately. Always check that your invoices comply with ZIMRA requirements.
Category B — Zero-Rated Supplies (0%)
Zero-rated supplies are taxable at 0%. This means the supplier does not charge VAT to the customer, but can still claim input VAT on purchases used to make these supplies. Zero-rating is designed to keep the prices of essential goods low while allowing businesses to recover their VAT costs.
Complete List of Zero-Rated Items
Basic Foodstuffs
- Mealie meal (all grades) and maize grain
- Bread (brown and white, standard loaves)
- Fresh milk (pasteurised, not flavoured or ultra-processed)
- Cooking oil (vegetable oils for domestic cooking)
- Sugar (white and brown, unrefined)
- Rice (uncooked)
- Flour (wheat flour, mealie flour, bread flour)
- Salt (table salt, cooking salt)
- Fresh fruits and vegetables (unprocessed)
- Eggs (fresh chicken eggs)
- Dried beans, lentils, and pulses
- Kapenta (dried fish)
- Margarine (basic table margarine)
- Tea (loose leaf and tea bags, not specialty flavoured)
- Peanut butter (plain, not flavoured or speciality)
Agricultural Inputs
- Seeds for planting (maize, wheat, soya, tobacco seeds)
- Fertilisers (compound fertilisers, ammonium nitrate, urea)
- Pesticides and herbicides for agricultural use
- Animal feed and stock feed
- Livestock (cattle, goats, poultry for farming)
- Farming implements (ploughs, harrows, basic tools)
- Irrigation equipment
Exports
- All goods exported from Zimbabwe (with proof of export)
- Services supplied to non-residents for use outside Zimbabwe
- International transport of goods
Other Zero-Rated Items
- Fuel — petrol, diesel (also subject to separate fuel levies)
- Prescription medicines and pharmaceutical products
- Educational materials — prescribed textbooks, exercise books
- Sanitary products — sanitary pads, tampons
- Water supplied by local authorities (piped water)
- Electricity (domestic supply up to certain limits)
Business Advantage: If your business primarily makes zero-rated supplies (e.g., a grocery wholesaler dealing in basic foodstuffs), you will typically be in a VAT refund position — you pay VAT on your inputs (rent, equipment, services) but do not collect VAT from customers. ZIMRA should refund the difference.
Category C — Exempt Supplies
Exempt supplies are completely outside the VAT system. No VAT is charged on these supplies, and the supplier cannot claim input VAT on purchases related to making exempt supplies. This means the VAT on inputs becomes a cost to the business.
Complete List of Exempt Supplies
Financial Services
- Bank charges and fees (account maintenance, transaction fees)
- Interest on loans and credit facilities
- Insurance premiums (life, non-life, medical)
- Foreign exchange transactions (buy/sell spreads)
- Securities trading (shares, bonds, government securities)
- Pension fund management services
- Mobile money service charges (EcoCash, OneMoney fees — note: IMTT is separate)
Educational Services
- School fees — primary and secondary education
- University and college tuition fees
- Vocational training fees at registered institutions
- Examination fees (ZIMSEC, Cambridge, professional bodies)
- Boarding fees at educational institutions
Medical and Health Services
- Medical consultation fees (doctors, dentists, specialists)
- Hospital services and admission fees
- Laboratory and diagnostic services
- Ambulance services
- Medical aid scheme administration
Residential Accommodation
- Rental of residential property (long-term residential leases)
- Sale of residential property (subject to CGT instead)
Other Exempt Supplies
- Public transport — commuter omnibuses (ZUPCO), urban buses
- Burial and cremation services
- Religious organisation services
- Charitable organisation activities (registered charities)
- Government services (non-commercial government functions)
- Postal services (ZimPost standard services)
Key Distinction: A hospital cannot claim input VAT on medical equipment because medical services are exempt. This makes the equipment more expensive for the hospital compared to a VAT-registered retailer who can reclaim the VAT. This is why some businesses prefer to be in Category A or B rather than Category C.
VAT Registration Requirements
Not all businesses need to register for VAT. The registration rules are:
Mandatory Registration
You must register for VAT if:
- Your taxable supplies (Category A + Category B) exceed US$25,000 in any 12-month period
- You reasonably expect your taxable supplies to exceed US$25,000 in the next 12 months
Voluntary Registration
You may register voluntarily if:
- Your taxable supplies are below US$25,000 but you want to claim input VAT
- You are starting a business and expect to reach the threshold
- Your customers are VAT-registered businesses who need tax invoices
Who Should NOT Register?
Businesses that only make exempt supplies (Category C) cannot register for VAT. If you run a school, clinic, or purely financial services business with no taxable supplies, VAT registration is not applicable.
Registration Process
- Complete the VAT registration form (REV 1) or apply via TARMS e-Services
- Submit to your local ZIMRA office or upload online
- Provide supporting documents: company registration, tax clearance, proof of business activity
- ZIMRA reviews and issues a VAT registration certificate
- Begin charging VAT from the effective date of registration
See our ZIMRA Registration Guide and TARMS Guide for detailed steps.
VAT Filing and Payment Dates
VAT-registered businesses must file returns and make payments by the following deadlines:
| Filing Period | Return and Payment Due Date | Notes |
|---|
| January 2026 | 25 February 2026 | Monthly filer |
| February 2026 | 25 March 2026 | Monthly filer |
| March 2026 | 25 April 2026 | Monthly filer |
| April 2026 | 25 May 2026 | Monthly filer |
| May 2026 | 25 June 2026 | Monthly filer |
| June 2026 | 25 July 2026 | Monthly filer |
| July 2026 | 25 August 2026 | Monthly filer |
| August 2026 | 25 September 2026 | Monthly filer |
| September 2026 | 25 October 2026 | Monthly filer |
| October 2026 | 25 November 2026 | Monthly filer |
| November 2026 | 25 December 2026 | Monthly filer |
| December 2026 | 25 January 2027 | Monthly filer |
For all filing deadlines, see our ZIMRA Returns Dates 2026 calendar.
Late Filing Penalty: Late VAT returns attract a penalty of US$30 per day for the first day and US$10 for each subsequent day the return is outstanding, plus interest on any unpaid VAT at the prescribed rate. See
ZIMRA Penalties for details.
Mixed Supplies and Apportionment
Many businesses make a mix of taxable (Category A/B) and exempt (Category C) supplies. In this case, input VAT apportionment is required:
- Directly attributable inputs: VAT on inputs used exclusively for taxable supplies can be fully claimed. VAT on inputs for exempt supplies cannot be claimed at all.
- Common inputs: VAT on inputs used for both taxable and exempt supplies (e.g., office rent, electricity) must be apportioned. The standard method is based on the ratio of taxable to total supplies.
Example: A pharmacy sells medicines (zero-rated) and cosmetics (standard rated 15%), and also offers health consultations (exempt). The pharmacy must apportion input VAT on common costs like rent and utilities based on the proportion of taxable vs exempt turnover.
Related Tax Guides
Need a company registered? Visit RegisterCompany.co.zw. For business documents, check ZimDocs.co.zw.