March 28, 2002

NAMIBIA: 1% tax rate for absentee landlords

Namibian government on March 27 proposed slapping a 0,75 per cent tax rate on the value of each hectare of undeveloped land owned by commercial farmers in Namibia and one per cent on land owned by absentee landlords.

The move is aimed at compelling farmers to sell their excess land to Government for resettlement. Lands, Resettlement and Rehabilitation Minister Hifikepunye Pohamba introduced the proposed land tax in the National Assembly and called on Members of Parliament to support the move. Pohamba had earlier announced that the land tax would be introduced on April 1 (Monday), but on March 27 there was still no indication whether this would still be the case after debate on the matter was adjourned to Tuesday, April 2.

Through the proposed land taxation, Pohamba said, Government would be able to raise revenue of at least N$ 18,4 million each year. He said the tax rate for absentee landlords was likely to be pushed up after one year when a re-evaluation of the rates would be done. Pohamba said the tax rate would increase by 0,25 per cent per hectare on each additional farm owned by an individual commercial farmer. Under the proposed tax rate, a Namibian farmer will pay 0,75 per cent per hectare value and 0,25 per cent per hectare value will be added for each additional farm a person owns. It is not clear what role the size of farms will play and how the agro-ecological zones helped to determine the tax rates.

When he made his first announcement on land tax in February, Pohamba said a fixed rate would be determined by the National Assembly. On top of the fixed rate, farmers would be taxed according to which agro-ecological zone their land falls in and the carrying capacity of each farm. Agro-ecological zones are determined by factors such as how much rain an area receives. Farmers will not be taxed on improvements they have made on their farms.

Pohamba said that Government identified 12.325 taxable commercial agricultural properties in Namibia and that ownership was broken up into land owned by Namibians and land owned by non-Namibians. "In most cases, non-citizens own large tracts of land. These tracts of land are either completely neglected and held for speculative purposes or are grossly under-utilised," he said. Because such land was under-utilised, Pohamba said, his Ministry proposed imposing a one per cent tax rate on land in the hands of absentee landlords. Based on a 60 per cent collection success rate and judging by the implementation of similar tax elsewhere, Pohamba said Government expected to raise around N$18,4 million over the next 12 months.

Pohamba's proposal came under fire from Swapo MP Ponhele ya France who suggested that the objective be to grab land instead of forcing people off it through land tax. He said although the land tax would undo the injustice against Namibians by Europeans who took their land, it was best to repossess the land without any compensation. "Some of us have nowhere even to be buried. This must be corrected," he said. Ya France suggested that Government should not tax formerly disadvantaged people who bought land under an affirmative action loan scheme. (The Namibian)

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