Land tax review expected
Different land tax regimes are envisaged for foreign land owners and Namibians.
ELLANIE SMIT
Farmers are hopeful that a new land tax regime to be proposed to cabinet will finally address the issues of determining land valuations, which they have been fighting for since 2012.
They were responding to comments made at public consultations held in Windhoek on the second land conference that the ministry would soon announce a new land tax regime. The current regime has been in existence since 2004.
At the consultations the land reform ministry’s valuator-general, Rudolf !Nanuseb, explained that since the inception of the land tax in 2004 there had been three valuation rolls - one in 2004, another in 2007 and the latest in 2012.
He said the tax levied on land is progressive and that they were now going to practise “constructive discrimination” where they envisage different land tax regimes for foreign land owners and Namibians.
However, !Nanuseb emphasised the need to have a sustainable and affordable land tax, warning that otherwise, agricultural production would be destroyed.
!Nanuseb told Namibian Sun that a proposal would be submitted to the cabinet, but that it was still under discussion and therefore he could not elaborate on the proposed new tax rates for foreigners and Namibians.
Currently the tax rate is 1.75% of the value of the land for foreigners progressing on 0.25% for any additional farms, while the tax rate for Namibians is 0.75%, progressing on 0.25% for additional land.
The president of the Namibian Agricultural Union (NAU), Rhyno van der Merwe, told Namibian Sun that land tax for both foreigners and Namibians is already progressive. “It is programmed that way.”
He explained that the appearance of the 2012 valuation roll resulted in tax increases of up to 900% for some individual farmers.
Van der Merwe said farmers made objections against these increases and even approached the minister.
“It was made clear that we have no objection paying land tax, but it should be affordable and fair.”
Authorities say land tax is based on the valuation of agricultural land carried out by the lands ministry in a valuation roll. Since 2012, the roll’s readjustment to present-day market prices has become a subject of legal proceedings although it has been done in accordance with the applicable Land Valuation and Taxation Regulations.
Various issues are currently pending before the High Court. Among them is the question of whether land valuation should be based on the market value, as is stipulated in the present legislation.
According to Van der Merwe, the union suggests that the rate of land tax should rather be adjusted, because there are questions of how the value of the land was arrived at.
“In our view, the less rainfall and carrying capacity land has, the less valuable it is. Thus, as rainfall and carrying capacity increases, value should increase. Currently, there are farms in the south of the country with greater value than farms in the northern areas.
“Since 2012 the NAU has made several suggestions to change regulations in the law. The ministry took notice of these suggestions and even sent consultants to us to look at our suggestions.”
Referring to the ruling of valuation court last year, he said that more than 1 400 landowners appealed the ruling while an application for the review in the procedure of creating the valuation roll was made.
“We are campaigning for correct land valuations. We are not against paying land tax, but it has to affordable and fair. We want the regulations changed.” he emphasised.
Farmers are hopeful that a new land tax regime to be proposed to cabinet will finally address the issues of determining land valuations, which they have been fighting for since 2012.
They were responding to comments made at public consultations held in Windhoek on the second land conference that the ministry would soon announce a new land tax regime. The current regime has been in existence since 2004.
At the consultations the land reform ministry’s valuator-general, Rudolf !Nanuseb, explained that since the inception of the land tax in 2004 there had been three valuation rolls - one in 2004, another in 2007 and the latest in 2012.
He said the tax levied on land is progressive and that they were now going to practise “constructive discrimination” where they envisage different land tax regimes for foreign land owners and Namibians.
However, !Nanuseb emphasised the need to have a sustainable and affordable land tax, warning that otherwise, agricultural production would be destroyed.
!Nanuseb told Namibian Sun that a proposal would be submitted to the cabinet, but that it was still under discussion and therefore he could not elaborate on the proposed new tax rates for foreigners and Namibians.
Currently the tax rate is 1.75% of the value of the land for foreigners progressing on 0.25% for any additional farms, while the tax rate for Namibians is 0.75%, progressing on 0.25% for additional land.
The president of the Namibian Agricultural Union (NAU), Rhyno van der Merwe, told Namibian Sun that land tax for both foreigners and Namibians is already progressive. “It is programmed that way.”
He explained that the appearance of the 2012 valuation roll resulted in tax increases of up to 900% for some individual farmers.
Van der Merwe said farmers made objections against these increases and even approached the minister.
“It was made clear that we have no objection paying land tax, but it should be affordable and fair.”
Authorities say land tax is based on the valuation of agricultural land carried out by the lands ministry in a valuation roll. Since 2012, the roll’s readjustment to present-day market prices has become a subject of legal proceedings although it has been done in accordance with the applicable Land Valuation and Taxation Regulations.
Various issues are currently pending before the High Court. Among them is the question of whether land valuation should be based on the market value, as is stipulated in the present legislation.
According to Van der Merwe, the union suggests that the rate of land tax should rather be adjusted, because there are questions of how the value of the land was arrived at.
“In our view, the less rainfall and carrying capacity land has, the less valuable it is. Thus, as rainfall and carrying capacity increases, value should increase. Currently, there are farms in the south of the country with greater value than farms in the northern areas.
“Since 2012 the NAU has made several suggestions to change regulations in the law. The ministry took notice of these suggestions and even sent consultants to us to look at our suggestions.”
Referring to the ruling of valuation court last year, he said that more than 1 400 landowners appealed the ruling while an application for the review in the procedure of creating the valuation roll was made.
“We are campaigning for correct land valuations. We are not against paying land tax, but it has to affordable and fair. We want the regulations changed.” he emphasised.
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