Zimbabwe To Adjust Taxable Property Value From US$100 000. This is after a public objection that the majority of current owners of these properties are not high-income earners.
In the 2024 national budget, the Finance, Economic Development, and Investment Promotion Ministry introduced a wealth tax that subjects any owner of a property that is worth at least US$100,000 to a 1% yearly tax starting next year. The tax is expected to be paid over 12 months.
Zimbabwe To Adjust Taxable Property Value From US$100 000: Reason for Public Objection
The reason for the public’s objection and their demand to raise the threshold stems from the fact majority of properties valued at US$100,000 now were not always worth that much.
Most of them were purchased for between US$40 000 and US$50 000 and only increased in value over the years.
As a result, the majority of people who own these properties at the moment are either pensioners or inheritors of deceased estates who are not high-income earners.
Reacting to the issue at hand, Finance, Economic Development, and Investment Promotion Minister Mthuli Ncube expressed how welcoming he is of the public’s opinion regarding the various government proposals.
He mentioned that other countries besides Zimbabwe are imposing wealth taxes. He cited France, Switzerland, Columbia, Norway, and Spain as examples and noted how the wealth tax charged in Zimbabwe is similar to the one charged in France.
He explained that the simplest way of imposing a wealth tax is to charge it on property. Things will get complicated if the government has to start examining how much a taxpayer has, how much he spends, if he lives a luxurious life, or how many cars and houses he owns.
Ncube however agreed that the threshold needs to be adjusted from the current US$100,000 but could not say what the new threshold will be, as it will depend on the debate that happens in Parliament.
Although Ncube maintains that property is an indicator of how wealthy an individual is, experts have cautioned that this may not be the best way to impose a wealth tax.
There are concerns that these properties do not bring in income for the owners and that while owners aged 70 and above are exempt from paying the tax, the retirement age is 65.
The implication of this is that pensioners who are collecting a meager pension will be subject to the tax for five whole years.
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