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CCC MP faces legal setback in challenge against wealth tax
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Marondera Central opposition legislator Mr. Caston Matewu has suffered a legal defeat in his attempt to challenge the Government's wealth tax, which was introduced in the 2024 National Budget and has been in effect since December 2023.
The wealth tax, which imposes a one percent levy on residential properties exceeding a value of US$250,000, does not apply to a taxpayer's primary residence but targets larger properties owned for rental purposes. The Government introduced the tax as a measure to address income inequality and to generate revenue from higher-value properties.
Mr. Matewu, a vocal critic of the tax, argued that the levy was unconstitutional, unfair, and discriminatory. In his legal application, he contested the legitimacy of Section 36 O of the Income Tax Act and Section 22 O of the Finance Act, seeking their invalidation on grounds that they violated several provisions of the Constitution.
His legal argument was based on the claim that the wealth tax breached the constitutional right to equal protection under Section 56(1), infringed on the right to shelter under Sections 81(1)(f), 47, and 51, and contravened Section 298(1)(b)(i), which calls for the fair sharing of the tax burden.
Furthermore, Mr. Matewu argued that the tax unfairly targeted middle-class property owners while sparing those whose wealth is tied to other forms of assets, such as commercial buildings, industrial properties, and shares. His legal team also contended that the wealth tax was retrogressive and irrational, disproportionately affecting individuals who own multiple properties due to inheritance, family circumstances, or as in the case of widows, pensioners, and the disabled.
However, High Court Judge Justice Gladys Mhuri dismissed Mr. Matewu's application, stating that the case was based on an overly broad and unfocused interpretation of constitutional provisions. In her judgment, Justice Mhuri remarked: "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 further explained that the wealth tax only applies to additional residential properties valued above US$250,000, explicitly excluding a taxpayer's primary residence. Additionally, commercial and industrial properties, which are already subject to their own separate taxes, are exempt from this levy.
The ruling marks a significant setback for Mr. Matewu's efforts to have the wealth tax declared unconstitutional. The Government has maintained that the wealth tax is a necessary tool in addressing wealth inequality, and with this legal challenge now dismissed, the tax remains in effect as part of the broader fiscal reforms introduced in the 2024 National Budget.
The wealth tax, which imposes a one percent levy on residential properties exceeding a value of US$250,000, does not apply to a taxpayer's primary residence but targets larger properties owned for rental purposes. The Government introduced the tax as a measure to address income inequality and to generate revenue from higher-value properties.
Mr. Matewu, a vocal critic of the tax, argued that the levy was unconstitutional, unfair, and discriminatory. In his legal application, he contested the legitimacy of Section 36 O of the Income Tax Act and Section 22 O of the Finance Act, seeking their invalidation on grounds that they violated several provisions of the Constitution.
His legal argument was based on the claim that the wealth tax breached the constitutional right to equal protection under Section 56(1), infringed on the right to shelter under Sections 81(1)(f), 47, and 51, and contravened Section 298(1)(b)(i), which calls for the fair sharing of the tax burden.
However, High Court Judge Justice Gladys Mhuri dismissed Mr. Matewu's application, stating that the case was based on an overly broad and unfocused interpretation of constitutional provisions. In her judgment, Justice Mhuri remarked: "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 further explained that the wealth tax only applies to additional residential properties valued above US$250,000, explicitly excluding a taxpayer's primary residence. Additionally, commercial and industrial properties, which are already subject to their own separate taxes, are exempt from this levy.
The ruling marks a significant setback for Mr. Matewu's efforts to have the wealth tax declared unconstitutional. The Government has maintained that the wealth tax is a necessary tool in addressing wealth inequality, and with this legal challenge now dismissed, the tax remains in effect as part of the broader fiscal reforms introduced in the 2024 National Budget.
Source - The Herald
