• Simbisa Brands paid US$2.1 million in Fast Food Tax during FY2026 as Zimbabwe operating profit rose 39%
• Zimbabwe generated US$265.2 million in revenue and served a record 53.6 million customers during the year
• Customer growth, procurement savings and productivity gains helped absorb the tax while Simbisa expanded its Zimbabwe store network

Harare- Simbisa Brands, Zimbabwe’s largest fast food operator and a pan African quick service restaurant group with operations in Zimbabwe, Kenya and Eswatini and franchised outlets across six other African markets, paid US$2.1 million in Fast Food Tax during FY2026 as its Zimbabwe operating profit increased 39%. The tax was introduced from 1 January 2025 as part of the Government’s revenue measures, with the Finance Ministry also presenting it as a measure to encourage more responsible consumption of highly processed foods and address obesity and associated non communicable diseases.

The levy applies to specified fast food products including pizza, burgers, hot dogs, shawarma, French fries, chicken, doughnuts and tacos. The 2025 Budget initially proposed a 0.5% charge, which was subsequently implemented at 1% under the revised fiscal framework. ZIMRA requires operators to calculate the charge on the sale value of qualifying products and remit the proceeds to the tax authority.

The tax has now become a recurring cost in Simbisa’s largest market. Zimbabwe generated US$265.2 million of Simbisa’s US$367.2 million group revenue in FY2026, accounting for 72% of the total. The market produced US$35.5 million of operating profit before depreciation and amortisation, up from US$25.5 million a year earlier. The US$2.1 million Fast Food Tax therefore amounted to about 0.8% of Zimbabwe revenue and 5.9% of operating profit before depreciation and amortisation.

The burden has been carried alongside a substantial expansion in the business. Simbisa served 53.6 million customers in Zimbabwe during the year, an 11% increase, while revenue grew 23%. Delivery orders increased 75%, the Zimbabwe network added 17 net counters and six existing outlets were refurbished, taking the market to 352 counters.

Simbisa has previously stated that it chose to absorb the Fast Food Tax rather than immediately pass the full cost through to consumers. During FY2025, when the levy first came into effect, the company paid at least US$0.9 million in the second half of its financial year and said the tax had eroded margins. The strategy continued into FY2026, with procurement savings, productivity improvements and tighter operating expenditure helping to absorb part of the higher cost.

That approach places the tax directly against the economics of the restaurant network. Every dollar absorbed by Simbisa has to be recovered through a combination of customer volumes, average spend, procurement efficiency, labour productivity, energy management and other operating savings. The FY2026 numbers show that the company generated enough additional operating income to carry the tax while expanding the network.

Customer traffic provided much of that additional income. Group customer volumes increased 11%, while real average spend increased 8%, producing 19.8% group revenue growth to US$367.2 million. In Zimbabwe, the combination of higher customer numbers and stronger delivery activity produced 23% revenue growth and a 39% increase in operating profit.

The tax therefore sits within a wider cost structure that is becoming more demanding. Simbisa reported higher employee costs, energy expenses, distribution costs and input costs during the year, while the Fast Food Tax added a direct fiscal charge on qualifying sales. Management says procurement savings, productivity improvements and disciplined operating expenditure protected margins sufficiently to accommodate those pressures.

The fiscal contribution is also becoming measurable at national level. The Finance Ministry reported that US$954,912 had been collected from the Fast Foods Tax between January and June 2025, although accounting for the tax only became effective from March because of delays associated with the tax administration system. Simbisa’s US$2.1 million payment for its FY2026 therefore represents a substantial contribution from a single corporate group over a full financial year.

Government has not publicly identified the Fast Foods Tax as a separately earmarked revenue stream for a particular expenditure programme. Its stated policy objectives have centred on revenue mobilisation and discouraging consumption of highly processed foods. That distinction is important because the tax is collected as part of the broader fiscal system rather than operating as a dedicated charge whose proceeds are automatically allocated to a specific health or development programme.

For Simbisa, the question now moves into the economics of passing or absorbing the cost as the tax accumulates. The company has been able to absorb the levy while customer volumes have grown, but that strategy requires operating efficiencies to keep pace with the tax and other cost increases. If those efficiencies weaken, the company has fewer options: it can accept lower margins, adjust prices, increase customer volumes or find additional savings elsewhere in the cost base.

The consumer environment makes that trade off particularly important. Simbisa’s own reporting describes a market where disposable incomes remain constrained and consumers remain highly responsive to value. Its response has been to maintain value offerings and increase customer traffic rather than relying solely on higher menu prices.

Delivery has become part of that strategy. Zimbabwe delivery orders rose 75% during FY2026, following 74% growth in the first half and 83% growth in the third quarter. The channel allows Simbisa to increase customer reach and transaction frequency while extracting more revenue from an existing restaurant network.

The capital being committed to the network also raises the required return from each outlet. Simbisa invested US$23.2 million across the group during FY2026, including US$17.7 million in Zimbabwe. The company added stores while also refurbishing existing outlets and investing in delivery, digital ordering and other operating infrastructure.

Cash generation provides the financial capacity to continue that investment. Group cash generated from operations increased 27.1% to US$65.2 million, while net operating cash flow increased 30.8% to US$50.3 million. The group ended the year with US$21.9 million in cash compared with US$12.3 million previously.

The combination of tax absorption, customer growth and cash generation gives Simbisa room to continue expanding, although the economics of every additional store have to carry the same fiscal and operating costs. The 39% increase in Zimbabwe operating profit provides evidence that the existing network generated enough incremental earnings to accommodate the additional burden during FY2026.

The next phase will put that model under a larger test. Simbisa enters FY2027 with plans to continue investment in delivery, digital ordering, drive through formats, selective network expansion and store refurbishments. At the same time, management expects consumer spending to remain constrained while taxation, employee costs, input inflation and climate related risks continue to put pressure on margins.

The tax therefore has a direct bearing on the return generated from Simbisa’s expansion programme. A new outlet adds revenue and customer capacity, but the incremental sales also carry the Fast Food Tax on qualifying products, alongside labour, energy, distribution and other operating costs. The commercial return comes from generating enough additional customer traffic and operating efficiency to cover those costs while recovering the capital invested in the outlet.

Simbisa’s FY2026 performance shows that this equation remained favourable during the year. The company paid US$2.1 million in Fast Food Tax, increased Zimbabwe revenue to US$265.2 million, raised operating profit before depreciation and amortisation to US$35.5 million and served 53.6 million customers.

The next measure is the incremental cash and profit generated after the tax and the full cost of expansion. If customer volumes continue rising and procurement, productivity and energy efficiencies continue to offset fiscal and operating costs, Simbisa can maintain its current expansion economics. If cost growth begins to run ahead of customer traffic and operating efficiency, the same tax becomes a progressively larger claim on store margins.

The US$2.1 million payment has therefore moved beyond a line in Simbisa’s tax expenses. It represents a recurring fiscal cost on Zimbabwe’s largest formal fast food network at a time when the company is expanding its customer base, store footprint and delivery infrastructure. The FY2026 results show that Simbisa could absorb that cost while increasing profitability. The durability of that model will be established by the cash returns from the larger network after taxation, labour, energy, distribution and capital expenditure are accounted for.

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