Wealth Tax Put on Ice After Public Outcry: Minister

Finance Minister Mthuli Ncube (image source)

Zimbabwe’s government has shelved the rollout of its proposed wealth tax after widespread criticism from the public and concerns raised in Parliament. The levy, which Finance Minister Mthuli Ncube announced in the 2025 national budget, has been delayed until the necessary legal and administrative frameworks are finalized.

Deputy Finance Minister Kuda Mnangagwa told lawmakers last week that although the wealth tax remains government policy, collection cannot begin without enabling regulations and supporting systems. The proposed levy targets owners of second homes valued at more than US$250,000, with an annual charge of 1% of the property’s value. The tax exempts primary residences—homes in which owners normally live—and introduces a cap of US$50,000 for properties valued above US$5 million.

Initially, the plan outlined a much lower threshold of US$100,000 and applied regardless of whether the property was a primary or secondary residence. Following fierce backlash from citizens, property owners, and opposition parties, government revised the policy, doubling the threshold and limiting it to secondary properties. Critics argued that the original design would have unfairly penalized middle-income earners and was nearly impossible to administer effectively.

Experts have also flagged challenges with enforcement. The Zimbabwe Revenue Authority (ZIMRA) will need to establish credible and up-to-date property valuations, coordinate with local councils, and clarify definitions of what constitutes a “primary residence.” Without these safeguards, risks of misclassification, disputes, and inequities in taxation are high. A further complication is the lack of a comprehensive property register, with many municipalities relying on outdated valuation rolls.

According to Zim Property Digest, valuations in Zimbabwe often lag behind market realities, producing inconsistent assessments that could lead to both under-taxation and over-taxation. Local authorities have expressed doubts about the tax’s immediate relevance, with Bulawayo City Council noting that no dwelling in its jurisdiction currently meets the US$250,000 threshold under its official valuation system.

The government’s wealth tax initiative is part of a broader strategy to expand revenue sources, reduce inequality, and ensure high-value asset owners contribute more to public services. Globally, wealth taxes are typically targeted at second or investment properties, with primary residences exempted to avoid undermining housing security. However, such taxes are only effective when supported by robust institutions and accurate valuation frameworks—areas where Zimbabwe has historically struggled.

Past attempts at innovative taxation in the country have frequently faltered due to poor enforcement mechanisms, weak data systems, and inflation-driven distortions. Analysts caution that without clear guidelines and transparency, the wealth tax could meet the same fate. Parliament will now debate the administrative structures needed to enforce the levy. Key issues include how to distinguish between primary and secondary residences, valuation methods, timelines for assessments, and avenues for appeal. Only after these are resolved will the government consider setting a start date for tax collection.

Finance Minister Mthuli Ncube defended the revised plan in Parliament, stressing its fairness:

“We must exempt the primary residence of an owner… So the primary residence is excluded. In fact, I am proposing a new threshold of US$250,000 … And there should be a cap: no-one should pay more than US$50,000 per annum.”

Until Parliament finalizes the necessary measures, the wealth tax remains on hold. Property owners, real estate players, and financial analysts are expected to lobby for clearer safeguards and guarantees against arbitrary implementation.