The Zimbabwe Revenue Authority (ZIMRA) has issued a crucial public notice regarding the change of the Value Added Tax (VAT) rate from 15% to 15.5%, effective 01 January 2026. This adjustment brings specific requirements for declaration in the Tax and Revenue Management System (TaRMS).

VAT Category Rates for 2026

The transition affects different operator categories as follows:

• Category C, B, and D: Fixed at 15.5%.
• Category A: 15% for December 2025 and 15.5% for January 2026.

A key challenge arises for Category A taxpayers who must submit a combined return for December/January 2026, due by 10 February 2026. Since TaRMS is configured to compute tax at 15% for this specific period, operators must follow a specific manual adjustment process.

Guide for Category A Registered Operators

To ensure correct tax calculation in TaRMS for the December/January period, follow these steps:

1. Determine January Output Tax: Calculate the Total Output Tax for January 2026 at the new rate of 15.5%.
2. Back-Calculate Value of Supply: Determine what Value of Supply would result in the same tax amount if the rate were 15%. (Formula: Output Tax * 100 / 15).
3. Combine Values: Add the actual Value of Supply for December 2025 (taxed at 15%) to the back-calculated figure from step 2.
4. Declare in TaRMS: Enter this combined total in the "Value of Supply" field on your return.

Example: Taxpayer M
- Dec 2025 Sales: $2,000 (Tax @ 15% = $300)
- Jan 2026 Sales: $3,000 (Tax @ 15.5% = $465)
- Total Tax Due: $765

The Adjustment: To get $465 tax at a 15% system rate, the "adjusted" January Value of Supply is $3,100 ($465 * 100 / 15).
Final Declaration: $2,000 (Dec) + $3,100 (Adjusted Jan) = $5,100.

Time of Supply Rules (Section 8)

If you supplied goods or services on or before 31 December 2025 (15% rate) but are required to account for them in a 2026 tax period (where TaRMS uses 15.5%), a similar back-calculation is required. In this case, you must determine the Value of Supply that gives the 15% tax equivalent when the system applies 15.5%.

Important Reminder: All taxpayers performing these calculations must attach a summary clearly showing the actual Value of Supply and Output Tax alongside the adjusted figures used for the TaRMS submission.