High Court victory for wealth tax

Fidelis Munyoro

Chief Court Reporter

Marondera Central opposition legislator Mr Caston Matewu has suffered a legal defeat in his spirited attempt to challenge the Government’s wealth tax, introduced just over a year ago through the 2024 National Budget.

The tax, implemented in December 2023, imposes a one percent levy on residential properties exceeding a value of US$250 000, but excluding a taxpayer’s primary residence, just hitting the larger properties owned to be rented out.

The wealth tax was designed to address income inequality, but Mr Matewu argued that it was unconstitutional, unfair and discriminatory.

In his application, Mr Matewu contested the legitimacy of Section 36 O of the Income Tax Act and Section 22 O of the Finance Act, seeking their invalidation.

He argued the tax violated the constitutional right to equal protection under Section 56(1) of the Constitution, infringed on the right to shelter under Sections 81(1)(f), 47, and 51, and contravened Section 298(1)(b)(i), which mandates the fair sharing of the tax burden.

His case centred on the assertion that the tax disproportionately punished middle-class property owners, while sparing those whose wealth is tied to other forms of assets, such as commercial buildings, industrial properties and shares.

Mr Matewu, through his legal counsel, had contended that the tax was retrogressive and irrational, targeting individuals who might own multiple properties due to inheritance or family circumstances, including widows, pensioners, and the disabled.

High Court judge Justice Gladys Mhuri, however, dismissed the application.

She noted that Mr Matewu’s case was built on an overly broad and unfocused reliance on constitutional provisions, stating: “The applicant approached this court with a machine gun, hoping to hit a valid constitutional target.

“Unfortunately, none of the provisions support his cause.”

She said that the wealth tax applies only to additional residential properties worth more than US$250 000, excluding principal residences, and explicitly exempts commercial and industrial properties, which are already subject to their own taxes.