OK Zimbabwe to face US$2.05 million tax penalty over system breach
Zimra fines retailer for failing to comply with real-time transaction monitoring system
ZIBAMBWE – The Zimbabwe Revenue Authority (Zimra) has imposed a fine of US$2,054,250 on supermarket operator OK Zimbabwe for failing to comply with the Fiscal Data Management System (FDMS).
According to Zimra, the penalty covers a 90-day period beginning January 23, 2024, during which 914 tills across the retailer’s branches were not connected to the authority’s servers for real-time transaction monitoring.
OK Zimbabwe has challenged the sanction, arguing that technical challenges delayed the integration of the new system and that full compliance was achieved by December 2024.
The fine comes at a time when the retailer is already under financial pressure, with its latest results showing a steep drop in revenue and widening losses.
For the financial year ending March 31, 2025, OK Zimbabwe reported a 53 percent fall in revenue to US$240.1 million, compared with US$511.0 million a year earlier.
The company linked the decline to a 12 percent fall in sales volumes, driven by reduced consumer spending and ongoing macroeconomic instability in the country.
Net losses deepened to US$33.5 million from US$12.4 million in 2024, reflecting worsening operational conditions.
Loss before tax stood at US$30.3 million, weighed down by high operating costs, foreign exchange losses, and a US$10.3 million impairment on non-financial assets.
As a result, the headline loss per share widened to negative 2.24 US cents, compared with negative 0.84 US cents the previous year.
Operational challenges and restructuring efforts
In response to currency volatility, the company adopted the US Dollar as its functional currency effective April 1, 2024.
Management also embarked on cost reduction initiatives, including a rationalisation programme that led to the closure of loss-making outlets.
However, tight working capital left several stores poorly stocked, disrupting supply relationships and weakening the retailer’s competitiveness against informal traders.
Leadership comeback and recovery plan
The financial difficulties come amid a recovery plan rolled out under returning chief executive officer Willard Zireva, who resumed leadership in June after previously serving until 2017.
Zireva described the current business environment as challenging, citing unsettled supplier debts, stock shortages, and high liabilities.
He said the company’s immediate focus is on restoring financial stability, rebuilding supplier trust, and regaining lost customers.
To support the turnaround, OK Zimbabwe recently raised US$20 million through a rights issue and expects to secure an additional US$10.5 million from asset sales to fund debt repayment and restocking.
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