By Dorothy Moyo | Is Finance Minister Prof Mthuli Ncube’s Wealth Tax Sensible or a Threat to Citizen’s Shelter?

Finance Minister Prof Mthuli Ncube’s proposed wealth tax, levied on ordinary houses, is raising concerns about the government’s potential takeover of citizens’ shelters. Critics argue that it erodes property ownership rights and contradicts the basic human need for housing.

In response to the criticism, Prof Jonathan Moyo called for a thorough analysis of the budget by business, industry practitioners, and academics. He emphasized the importance of understanding the details before making judgments, pointing out the prevalence of misinformation.

The controversial “Wealth Tax” proposed by Minister Ncube aims to address tax regressivity, with a 1% levy on residential properties valued at a minimum of US$100,000. The revenue generated is intended for urban infrastructure development, including roads, water, sewer, and community health centers. Elderly property owners above 70 years are exempt.

However, critics, including Prof Moyo, question the characterization of this as a “wealth tax.” They argue that housing is a basic human need, not wealth or income. The state’s failure to provide adequate housing since 1980 further complicates the issue.

The proposal’s potential impact on those who have struggled to secure housing is a major concern. Critics suggest that taxing individuals who have managed to provide shelter for their families to fund urban development is misguided. They propose an exemption for the principal private residential property, focusing the tax on additional properties used for commercial purposes.

Another criticism is the impracticality of determining “market values of residential properties” in Zimbabwe, which is viewed as a subjective and corruption-prone endeavor. The residential property market is described as a seller’s enterprise marked by untold corruption.

In conclusion, while the concept of a wealth tax is ideal, critics argue that its implementation in Zimbabwe, given the prevailing poverty and unfulfilled promises of housing for all, is premature. Prof Moyo suggests that a wealth tax might be more acceptable if it excludes primary residences and targets additional properties used for commercial purposes.