ZIMRA's Public Notice 07 of 2026, issued on 27 January 2026, addresses the correct method for computing output tax on VAT returns submitted through the TaRMS self-service portal, with particular relevance to Category A operators filing the combined December 2025 and January 2026 return. The notice provides worked examples to illustrate the back-calculation formula applicable where taxpayers quote their Value of Output Supply (VOS) inclusive of VAT.
Background: VAT Rate Change
Following the reduction of the standard VAT rate from 15% to 15.5% with effect from 1 January 2026 as provided in the Finance Act, 2025 (Act No. 7 of 2025), operators must apply the correct rate and back-calculation formula to ensure that VAT returns submitted on TaRMS accurately reflect the correct output tax amount. Incorrect application of the rate or formula will result in either an under-declaration or over-declaration of output tax, both of which carry compliance consequences.
The Back-Calculation Formula
Where a Category A VAT operator knows the total consideration received from customers (inclusive of VAT), the output tax is derived using the following back-calculation formula:
Output Tax = VOS × 15.5 ÷ 100
Alternatively, to recover the VOS from a known output tax figure:
VOS = Output Tax × 100 ÷ 15.5
The VAT-exclusive sale value (the base amount before VAT) is derived as:
Tax-Exclusive Value = VOS × 100 ÷ 115.5
And confirming: Output Tax = Tax-Exclusive Value × 15.5 ÷ 100
It is important to note that the VAT fraction used to extract tax from a VAT-inclusive amount at the 15.5% rate is 15.5/115.5 (not 15.5/100). The formula VOS × 15.5/100 applies where the taxpayer is expressing the entire taxable turnover figure (inclusive of VAT) as the VOS and deriving the tax component therefrom for entry into the TaRMS return.
Worked Example: Taxpayer M
Taxpayer M is a Category A VAT operator who had total output supplies of USD 4,935.48 (inclusive of VAT) for the combined December 2025 / January 2026 return period.
| Item | Calculation | Amount (USD) |
|---|---|---|
| Value of Output Supply (VOS) inclusive of VAT | As declared | 4,935.48 |
| Output Tax | 4,935.48 × 15.5 ÷ 100 | 765.00 |
| Tax-Exclusive Supply Value | 4,935.48 × 100 ÷ 115.5 | 4,270.48 |
Taxpayer M should enter USD 765.00 as the output tax in their TaRMS return for the combined December 2025 / January 2026 period. The return is due by 10 February 2026 and any net tax payable must be settled by 15 February 2026.
Worked Example: Taxpayer G (Time of Supply Consideration)
Taxpayer G is also a Category A operator who received total VOS of USD 4,870.97 (inclusive of VAT) in the same period. An important consideration for Taxpayer G is the time of supply rule under section 8 of the VAT Act [Chapter 23:12]: the rate applicable to a supply is the rate in force at the earlier of the date of invoice or the date of payment. Accordingly, supplies invoiced or paid before 1 January 2026 attract the old 15% rate, while those on or after 1 January 2026 attract 15.5%.
| Item | Calculation | Amount (USD) |
|---|---|---|
| VOS (inclusive of VAT at 15.5%) | As declared | 4,870.97 |
| Output Tax | 4,870.97 × 15.5 ÷ 100 | 755.00 |
| Tax-Exclusive Supply Value | 4,870.97 × 100 ÷ 115.5 | 4,215.97 |
Combined December 2025 / January 2026 Return
Category A operators file VAT returns bi-monthly. The return covering December 2025 and January 2026 is due on 10 February 2026, with payment due on 15 February 2026. Operators must take care when consolidating supplies from both months, noting that December 2025 supplies were subject to 15% while January 2026 supplies attract 15.5%. Where it is possible to separate these by tax period, the operator should apply the appropriate rate to each period's supplies separately, then aggregate the output tax.
Entering the Return on TaRMS
When completing the VAT return on the TaRMS self-service portal at mytaxselfservice.zimra.co.zw, operators should ensure that the VOS field reflects the correct taxable turnover for the period and that the output tax field is populated using the correct formula as illustrated above. Any discrepancy between the declared VOS and the output tax that does not reconcile to the applicable rate (15% or 15.5%) will be flagged by TaRMS's validation rules.
Reminder: The combined December 2025 / January 2026 Category A VAT return is due on 10 February 2026. Payment of any net VAT liability is due on 15 February 2026. Operators must apply the 15.5% rate (using the formula Output Tax = VOS × 15.5/100) to January 2026 supplies and the 15% rate to December 2025 supplies.