Delta Corporation says punitive taxes choking beer value chain

DELTA Corporation Limited says policy inconsistency, currency changes and a punitive sugar tax and other statutory obligations are choking its value chain, undermining ease of doing business in the beer and beverages sector.

Group Finance Director Alex Makamure told the Industry and Commerce Portfolio Parliamentary Committee on 2027 budget priorities last week that Delta has anchored agricultural value chains since 1947 through contract farming, but the model is now under strain.

Makamure said Delta remains Zimbabwe’s exemplary taxpayer, growing fiscal collections from US$251 million to over US$300 million between 2024 and 2025 across excise, income tax and VAT, yet it retains little from its billion-dollar revenues because beer alone attracts 40% excise.

He said the business grew 40 percent since 2022 on the back of stability, but it is battling a US$100 million retrospective tax bill for 2019-2022.

The bill, he said, “is not due to non-payment, but to currency conversion after taxes paid in local currency were later valued at zero and now demanded again in foreign currency.”

Delta also flagged confusion in tax compliance as raised by the Confederation of Zimbabwe Industries (CZI).

“ZIMRA now requires two returns, one in local and one in foreign currency, yet Sections 15 and 28 of the VAT Act require only one return, with Section 38C governing method of payment.

“Compliance is being driven by public notices, not regulations as required under Section 78, forcing taxpayers into a computerised system that allows no flexibility even where there is no supporting legislation,” Makamure highlighted.

On sugar tax, he said Delta’s sparkling beverages unit has made losses for two years.

“The company held its price at US$1 for four packs through 2024, then cut to 500ml to 440ml and now 350ml to hold a US$1 for two price point.

“Sugar now costs US$1,800 per tonne including tax, up from US$800, making local production uncompetitive against imports getting concessions and evading tax,” he added.

He also stated that a 5% withholding tax on unregistered traders was blocking Delta’s 350-truck delivery network from supplying bottle stores classified as informal, forcing price hikes.

If nothing is done on sugar tax in the next budget, Makamure warned that drastic action will be taken.

The Committee is chaired by Zaka South MP Clemence Chiduwa.

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