The new wealth tax set to kick in … Zimra busy identifying those eligible to pay it

AUTHORITIES have started identifying all the people who are eligible to pay the country’s much-debated new wealth tax, the Zimbabwe Revenue Authority (Zimra) confirmed yesterday.

This comes after Finance minister Mthuli Ncube introduced the one percent wealth tax in his 2024 National Budget, saying then that the country’s tax structure benefited the rich at the expense of the poor.

The tax will be levied on all residential properties worth more than US$250 000 that are owned by individuals below 65 years of age. Speaking in Harare yesterday, at a well-attended annual tax review gathering hosted by The Financial Gazette — the country’s number one business publication — Zimra said it had embarked on a concerted evaluation process to identify those eligible to pay the wealth tax.

Mthuli Ncube, Finance Minister

“What is going to happen is that we have engaged ourselves and the ministry of National Housing, and we are already mapping out the strategies to make sure that those who are eligible to pay are going to do so. “We already have the statistics. So, what we are going to do is the valuation process, which is already underway and is being done by local authorities.

“Once we have that information, those that are eligible will be put in the database,” Zimra Commissioner responsible for domestic taxes, Misheck Govha, told the large gathering. “It is you who are going to acquit yourselves that this is my principal private residence. “Let us make sure that information is kept. We will do the visits and also the mapping, and we are also proposing we do that digitally.

“We have areas we have already demarcated. And, we are thinking that, for example … the Westgate area and Mutare Road in the northern suburbs … all those qualify. “The stand on its own is US$140 000 to US$250 000. So, what is going to be the value of the property if the stand is that much?” Govha said further.

He also said the process would be thorough enough to ensure that absolutely nobody who was eligible would escape the new tax. “I know here we all know who is supposed to pay and who is not supposed to pay. So, let us start paying … there is no way you are going to escape this.

“So, start making sure that you do not accumulate additional debt for yourself because at the end of the day you are going to pay it at the end of the year, or at the end of the quarter, or at the end of each month. “But what is being encouraged is that if you pay even monthly, it will be okay. We are putting in place the regulations on how you are going to pay it. But for now, pay as you go,” Govha added.

All this comes after Ncube increased the wealth tax threshold from US$100 000 to US$250 000 in December, during a robust debate on a number of taxes and levies that he had proposed in the 2024 National Budget. “In fact I am proposing a new threshold of US$250 000. I am also proposing a limit as to how much any person can pay.

“No one should pay more than US$50 000 per annum. That pertains to a property of about US$5 million. “In other words, if you have a property worth about that value and beyond, really you should not be paying more than that. There should be a cap somewhere,” Ncube said then.

He also confirmed at the time that people aged 65 years and above would be exempted from paying the new wealth tax. “On the wealth tax, I accept the contributions from the public, from the portfolio chairpersons and Members of Parliament that we need to move the threshold.

“Some members suggested that the 70 years exemption should be brought down to 65. Again, I agree with that, and that we must exempt the primary residence of an owner of a property,” Ncube also said.

The revision of the 2024 National Budget came after Parliament had urged Ncube to consider scrapping a number of the new taxes and levies that he had proposed, to cushion hard-pressed Zimbabweans in the country’s currently tough economic environment.