The Government of Zimbabwe intends to impose a “wealth tax” on homeowners whose properties have a minimum value of US$100 000.
Finance, Economic Development, and Investment Promotion Minister Mthuli Ncube, in his 2024 National Budget presentation on Thursday said the wealth tax will be levied at a rate of 1% of market values of residential properties with a minimum value of US$100 000. Said Ncube:
Mr Speaker Sir, the key fundamental of tax policy is to address the regressivity of tax that occurs when individuals
in a low-income category pay a higher percentage of their income as compared to individuals in higher income brackets.Consequently, the tax incidences fall disproportionately on the low-income groups resulting in inequality.
To ensure that every person contributes to the Fiscus in line with their levels of income, I propose to introduce a Wealth Tax levied at a rate of 1% of market values of residential properties with a minimum value of US$100 000.
Resources derived from the levy will be ring-fenced towards urban infrastructure development, in particular roads, water, sewer and community health centres.
Principal Private Residential properties owned by elderly persons above 70 years will, however, be exempt from the tax.
Journalist and Government critic Hopewell Chin’ono said the proposal by Ncube shows that the Zimbabwean economy has now collapsed. Chin’ono posted on X
In a move that shows that the Zimbabwean economy has now collapsed, the Government will now tax Zimbabweans and anyone else who owns houses in Zimbabwe, 1% of the house’s value.
It means that if your house is worth US$$400,000, you will pay US$4000 a year to the State.
It means with immediate effect of that tax coming in, rentals will also go up in Zimbabwe as property owners will simply pass on the tax to their tenants.
10 years of paying that tax for a person who owns one house worth US$400,000 will amount to US$40,000 or even more as the house value goes up.
The wheels have come off in Zimbabwe!
However, Government spokesperson Ndavaningi Mangwana defended the proposed tax, saying:
MANSION TAX was a concept proposed by one UK politician but was not eventually implemented. Levying this type of taxation is not a sign that things are collapsing.
It’s a recognition of the fact that there are people with high-value properties who have not paid any tax on the income from which they bought or built such mansions.
In Zimbabwe, there are many such people. A variant of the Mansion Tax has now been proposed in Zimbabwe.
We are not alone in this. Many states in America do charge for having a high-value home. The proposal by Minister @MthuliNcube is to levy such a surcharge on houses with values above US$100 000.
This will catch many and hence many are going to express an opposition to it. But it’s natural for people to resist and try to avoid taxation.
And it’s natural for governments to insist and enforce. This one is going to be interesting because it will catch man.
More: Pindula News