Wealth Tax Zimbabwe: Council & govt to both tax property? Mthuli’s latest attempt to ensnare the informal market

Zimbabwe’s regulatory environment has thrown a few spanners in the works for its citizens. The latest one comes from the Ministry of Finance through the National Budget Statement in which the Minister proposed a Wealth Tax.

“To ensure vertical equity, where taxpayers with more income or property contribute proportionately to the Fiscus, 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. The tax is payable in every year of assessment”

Prof. Mthuli Ncube

This Wealth Tax means property could be taxed at the municipal & state levels

This proposal by Prof. Mthuli brings up an interesting problem because property tax has been the realm of local councils according to the Urban Council Act [29:15]. Ratepayers will know that their municipality charges them an annual property tax for the homes.

The methodology of this tax is based on the average land area of the property holding as well as factoring in the amenity services and zoning of the suburbs or areas. This then gives the city councils an average charge for the land that comes on monthly council bills.