Simbisa Brands Covers 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 its margins.

The 1% fast-food tax, introduced on January 1, 2025, applies to all legally defined fast food items as part of the government’s revenue mobilization efforts. Since Simbisa’s financial year runs from July 1, 2024, to June 30, 2025, the tax affected its second-half results, increasing costs by about US$0.9 million.

Formal businesses like Simbisa, which make up just 23.9% of the economy, have been raising concerns over heavy taxation and enforcement, while most of the economy remains informal.

“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.

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,” Said Simbisa Chairman Addington Chinake.

Despite this, Simbisa recorded a 6% increase in profit after tax, rising to US$16.91 million. This was supported by a 7% revenue growth to US$306.45 million, up from the previous.

“In Zimbabwe, revenue grew 5% in FY 2025 versus the 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 CEO Basil Dionisio stated.

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.

“This was primarily driven by the Dial-a-Delivery platform enhancements, third-party aggregator integrations, and app-exclusive promotions and bundles,” said Dionisio.

Simbisa’s delivery volumes grew 42% in Zimbabwe and 33% in Kenya in FY 2025. During the year, the company opened 47 new stores, refurbished 21 stores, and closed 31 counters.

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.

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 added.