Wealth tax net cast wider

GOVERNMENT is working on an evaluation methodology to guide the collection of Wealth Tax and has directed the Zimbabwe Revenue Authority (Zimra) to further conduct benchmark studies with peers in the region and beyond to ensure effective implementation of the fiscal intervention for the benefit of the economy.

Treasury introduced the Wealth Tax in its 2024 National Budget and its collection was supposed to have commenced at the beginning of the year.

However, the evaluation of properties has been problematic with local authorities such as Bulawayo City Council saying they do not have properties valued at US$250 000, to qualify for Wealth Tax collections.

THE Zimbabwe Revenue Authority (Zimra) has announced that Tax clearance certificates will be accessible only through the new tax and revenue management systems (TaRMS) through the self-service portal.
Zimbabwe Revenue Authority (Zimra)

In a recent interview on the issue, Finance, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube, said while some councils can claim that they do not have properties fitting the bracket of Wealth Tax collection, the Government is convinced that the properties exist throughout the country.

He said the ministry has since recommended that Zimra deploys its team to visit destinations like Rwanda, which is already implementing the tax.

“It depends on who is doing the evaluation, it’s as simple as that. We are certain they (properties within the taxable bracket) exist and we are aware of the evaluations,” said Prof Ncube.

“For now, we are looking at the evaluation methodology in trying to make sure that we are going to come up with a fair evaluation so that we are able to cover all regions and its mainly cities at the end of the day. So, Zimra is mandated to do that, I’ve asked them to do that.

“I have asked them to visit other countries that have introduced a similar tax. For instance, Rwanda introduced this tax many years ago.

“So, we will also encourage the Zimra team to visit Rwanda and get first hand experience on how they have done it so that we don’t make mistakes and we are able to cover everybody adequately. We raised the bar from US$100 000 to US$250 000 and I think it is a very fair level.”

Prof Ncube said the public should understand that the Wealth Tax is not a housing tax but means of taxing wealthy individuals for the benefit of the economy.

“We are not taxing someone on their primary dwelling and if you live in a huge mansion but that is your only dwelling, we are not going to bother you because it is a roof over your head.

“This is not property tax but wealth tax, only that we have chosen one asset, which is property, something that reflects someone’s wealth because we are aware that wealthy individuals are investing in property,” said Prof Ncube. —chronicle