MP takes legal action against Zimbabwe govt over wealth tax controversy

Marondera Central opposition legislator Caston Matewu has dragged the Zimbabwean government to court over the controversial Wealth Tax, which he believes breaches provisions of the Income Tax Act and the Constitution of Zimbabwe.

Introduced in December 2023, the tax levies a 1% charge on the value of residential properties exceeding US$250,000, excluding a taxpayer’s primary residence. While aimed at addressing income inequality, the policy has drawn criticism.

Against this background, Matewu approached the High Court suing the government over the new policy. He cited Finance Minister Mthuli Ncube, the Parliament of Zimbabwe and the Attorney General as first, second and third respondents, respectively.

“TAKE NOTICE THAT the Applicant intends to apply to the High Court of Zimbabwe at Harare for an Order in terms of the Draft Order annexed to this notice and that the accompanying affidavit/s and documents will be used in support of the application.

“If you intend to oppose this application you will have to file a Notice of Opposition in Form No. 24, together with one or more opposing affidavits, with the Registrar of the High Court of Zimbabwe at Harare within ten (10) days after the date on which this notice was served upon you.

“You will also have to serve a copy of the Notice of Opposition and affidavit/s on the Applicant at the address for service specified below. Your affidavit/s may have annexed documents verifying the facts set out in the affidavits.

“If you do not file an opposing affidavit within the period specified above, this application will be set down for hearing in the High Court of Zimbabwe at Harare without further notice to you and will be dealt with as an unopposed application,” read part of the court document.

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.

Zimbabwe Revenue Authority (ZIMRA) Commissioner responsible for domestic taxes, Misheck Govha has already indicated that the tax authority has embarked on a concerted evaluation process to identify those eligible to pay the wealth tax.

“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,” Gova told a gathering at annual tax review hostes by the Financial Gazette.

Some property owners who spoke to Nehanda Radio claim the tax unfairly burdens them, especially those with limited cash flow to pay the annual levy.

Concerns exist that the wealthy might relocate assets or investments outside the country to avoid the tax.