GOVERNMENT is yet to begin collecting revenue from the introduced wealth tax targeting the affluent and other shadowy businesspersons named mbingas or zviganandas, despite its legislative approval, Finance deputy minister Kudakwashe David Mnangagwa has said.
Mnangagwa was responding to written questions in Parliament posed by Bulawayo proportional representation lawmaker Descent Bajila, who inquired about total collections for the first half of 2025.
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 and to generate revenue from the nation’s affluent minority, the policy has drawn criticism.
Under the measures, any owner of a property valued at a minimum of US$250 000 up from the initial US$100 000 was subject to 1% tax.
The revision came after Parliament had urged Finance minister Mthuli Ncube to consider scrapping a number of the new taxes and levies that he had proposed to cushion hard-pressed Zimbabweans in the country’s currently tough economic environment.
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Ncube also said people aged 65 years and above would be exempted from paying the new wealth tax.
In Parliament last week, his deputy said implementation of the wealth tax was “temporarily shelved” to allow for further stakeholder consultations and to refine the necessary administrative mechanisms and legislative amendments.
“Since the introduction of legislation requiring selected wealthy individuals to contribute to the fiscus through a wealth tax, our government temporarily shelved the implementation thereof, pending conclusion of requisite administrative modalities informed by the concerns raised by some stakeholders,” he said in response
“The additional administrative modalities and legislative amendments thereof will thus be tabled before Parliament for approval, paving way for implementation of the tax, revenue collection will thus commence after the refinement of the implementation modalities.
“We have temporarily shelved it until the administrative modalities have been sorted out and figured out.”
Mnangagwa said amendments would still need to come before august House.
The introduction of the wealth tax sparked public debate, with proponents arguing that it is an essential tool for social equity, forcing the elite to contribute their fair share to fund crumbling public services and reduce the country’s vast inequality.
They argued that it was a matter of tax justice, shifting the burden away from regressive consumption taxes that disproportionately affect the poor.
Critics, however, warned of severe unintended consequences including the potential for capital flight, where wealthy individuals move assets offshore to avoid the levy, and the immense administrative difficulty of accurately valuing diverse assets beyond real estate.
They argued that such a tax could stifle domestic investment and entrepreneurship at a time when the economy desperately needs both.
One of the critics, Marondera Central opposition legislator Caston Matewu dragged the government to court over the tax saying it breached provisions of the Income Tax Act and the Constitution of Zimbabwe.