Simbisa absorbs US$1m fast food tax to shield consumers

FAST-FOOD giant, Simbisa Brands Limited (Simbisa) paid close to US$1 million in fast-food tax during the first half of 2025, a levy it chose not to pass on to consumers despite pressure on margins.
The tax, introduced on January 1, 2025, applies a 1% charge to all items legally defined as fast food as part of Treasury’s revenue mobilisation measures.
Since Simbisa’s financial year runs from July 1, 2024, to June 30, 2025, the new levy impacted its second-half results, forcing the group to absorb nearly US$1 million in additional costs.
The tax comes amid growing complaints by formal businesses over heavy-handed taxation and enforcement, even as they account for only 23,9% of the economy, with the bulk being informal operators.
“The Zimbabwean operating environment saw the second half of the financial year characterised by a slowdown in economic growth and a significant shift in the local tax regime.
“Pleasing though, the market was able to deliver growth through disciplined pricing and customer-centric value offerings,” Simbisa chairman Addington Chinake said in a statement attached to the group’s financial year report for the period ended June 30, 2025.
“Of note was the introduction of the 1% fast-food tax, levied on all items defined at law as fast food, which was effective January 1, 2025.
“This tax led to an erosion of margins. Simbisa made the conscious decision not to pass the ‘food tax’ onto our customers and, as a result, contributed to the fiscus by paying at least US$0,9 million in fast-food tax.”
Despite the new tax, the group still posted a profit after tax increase of nearly 6% to US$16,91 million compared to the prior year.
This was supported by a 7% rise in revenue to US$306,45 million compared to the 2024 period.
The fast-food tax is particularly significant for Simbisa given that Zimbabwe accounted for nearly 71% of its operations during the review period.
The local unit recorded revenue of US$216,09 million, while its regional business contributed US$90,35 million.
“In Zimbabwe, revenue grew 5% in FY 2025 versus prior year with customer counts up 7% year-on-year, supported by menu innovation and aggressive promotions, though margins were compressed by power shortages, higher operating costs and the absorption of the fast-food tax,” Simbisa chief executive officer Basil Dionisio said.
“The region achieved 11% revenue growth despite a 6% decline in customer counts, as higher average spend and currency appreciation offset the impact of subdued consumer demand, political unrest and tax
reforms.”
He said organic growth was complemented by an expanded delivery footprint, with delivery volumes growing 42% in Zimbabwe and 33% in Kenya in FY 2025 versus prior year.
“This was primarily driven by the Dial-a-Delivery platform enhancements,
third-party aggregator integrations and app-exclusive promotions and bundles,” Dionisio said.
During the year, the group opened 47 new stores, refurbished 21 and closed 31 counters to end with 730 active counters, of which 604 are company-operated and 126 are franchised outlets.
Simbisa set aside US$18,58 million in capital expenditure commitments for the current year ending June 30, 2026, up from US$11,8 million the previous year.
This will fund a new store pipeline of 61 outlets (net 58) across company-operated markets, with a strong focus on drive-thru formats, alongside an extensive refurbishment programme covering 39 outlets.
“Simbisa Zimbabwe has 31 net new counters planned for FY 2026, with a strategic focus on drive-thru formats and delivery optimisation to enhance convenience and broaden reach.
‘Delivery currently contributes just 4% of total revenue, presenting significant headroom for growth,” Dionisio said.
“Expansion of delivery coverage from 66% to 80% of outlets by year-end, coupled with app-exclusive promotions, bundled offers and enhanced service standards will be key drivers of this growth.
“Simbisa Zimbabwe is targeting a 15% delivery-segment contribution by the end of FY 2026.”
He said an additional 19 store refurbishments were planned for FY 2026 to continually modernise and refresh the existing
network.
“Profitability will be safeguarded through increased local sourcing and workforce optimisation initiatives designed to protect margins against inflationary pressures, together with an expanded pilot solar programme.”
https://www.newsday.co.zw/business/article/200046746/simbisa-absorbs-us1m-fast-food-tax-to-shield-consumers