ZIMBABWE’S complex and frequently changing property tax regime is discouraging long-term investment and hindering economic growth, according to the Real Estate Investment Trusts Association of Zimbabwe.
Speaking at The Financial Gazette’s fifth annual Tax Review Breakfast in Harare last week, chairman Mike Juru made a strong appeal for simplifying Zimbabwe’s complex property tax system.
“An overtaxed society sacrifices long-term projects for survival,” he said.
“This leads to inadequate infrastructure, which has immense negative consequences for the economy in the longer term.”
He emphasised the importance of predictable, stable tax policies for boosting investor confidence.
“Investors are more likely to commit their resources when they have a clear understanding of the future tax environment.”
At present, property tax in Zimbabwe is a multi-layered system administered by various governing bodies.
Taxes vary based on a property’s location and type.
Mike E Juru, Chief Executive Officer for Integrated Properties
This leads to a patchwork of tax obligations that Juru contends is a major source of confusion and disincentivises development and investment.
Among the primary concerns he raised were the frequency of changes to Zimbabwe’s tax regime and the wide range of taxes levied on property transactions.
These include Capital Gains Tax, Income Tax, Stamp Duty, Withholding Tax, and a recently introduced Property Wealth Tax.
Juru stressed the urgent need for reform.
“Simplifying the tax structure by consolidating or reducing the number of taxes levied on property transactions would increase transparency and ease compliance for all stakeholders,” he urged.
He also advocated for policies that incentivise sustainable infrastructure development in line with international Sustainable Development Goals.
Meanwhile, it emerged at the Indaba that authorities have started identifying all the people who are eligible to pay the country’s much-debated new wealth tax.
Finance minister Mthuli Ncube introduced the one percent wealth tax in his 2024 National Budget, saying then that the country’s tax structure benefited the rich at the expense of the poor.
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.
The Zimbabwe Revenue Authority’s commissioner of domestic taxes, Misheck Govha said the tax collector had embarked on a concerted evaluation.
“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,” Zimra Commissioner responsible for domestic taxes, Misheck Govha, told the conference.
“It is you who are going to acquit yourselves that this is my principal private residence.
“Let us make sure that information is kept. We will do the visits and also the mapping, and we are also proposing we do that digitally.”
Ncube increased the wealth tax threshold from US$100 000 to US$250 000 in December, during a robust debate on several taxes and levies that he had proposed in the 2024 National Budget.
The revision of the 2024 National Budget came after Parliament had urged 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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