Govt moves to introduce land tax

ANOTHER amendment to current legislation is on the cards to pave the way for the introduction of land tax.

Government has decided that land tax be treated separate from other taxes and will not be allowed as a deduction against other tax liabilities. Accordingly, the Ministry of Finance is expected to table legislation to the National Assembly soon amending the Income Tax Act of 1981 to ensure that land tax will not be allowed as a deduction to determine a taxpayer’s taxable income.Finance Acting Deputy Commissioner Jack le Roux said on Friday that allowing land tax to qualify as a deduction along with many others especially applicable to business people, would defeat the purpose of instituting the levy.The implementation of land tax on commercial farm land is aimed at allowing Government to buy more land for resettlement.A N$20 000 fine or a five year jail term will be charged for the non-compliance of this law.At a Cabinet meeting held on May 11, it was also decided that a tax tribunal be established to facilitate dispute resolution arising from charging this levy.Le Roux said it was hoped that this process would speed-up the resolution of appeals, objections and other taxation complaints which can sometimes take several years to be heard before formal courts.Although several amendments related to land tax were made last year to the Agricultural (Commercial) Land Reform Act of 1995, the process has not yet reached full implementation stage.A Land Tax Bill is now also in the pipeline to prescribe the administration of the system.The Finance Ministry will be expected to bill land owners according to the valuation roll compiled by the Ministry of Lands, set dates for and accept payments, and take punitive action against those who fail to comply with the set regulations.Le Roux said the legislation had already been drafted and would probably be the final legal step before the levy can be formally instituted.The Agricultural (Commercial) Land Reform Act allows for land tax to be charged based on the value and size of the land.The law prescribes that Namibians be charged a rate of 0,75 per cent, while foreign and absentee landlords will be subjected to a rate of 1,75 per cent of the value of each hectare of undeveloped land.Resettlement beneficiaries who pay rent to the state for using the land, will not pay tax.The Lands Minister also holds the prerogative to grant exception upon application on the payment of land tax on commercial farm land.Accordingly, the Ministry of Finance is expected to table legislation to the National Assembly soon amending the Income Tax Act of 1981 to ensure that land tax will not be allowed as a deduction to determine a taxpayer’s taxable income.Finance Acting Deputy Commissioner Jack le Roux said on Friday that allowing land tax to qualify as a deduction along with many others especially applicable to business people, would defeat the purpose of instituting the levy.The implementation of land tax on commercial farm land is aimed at allowing Government to buy more land for resettlement.A N$20 000 fine or a five year jail term will be charged for the non-compliance of this law.At a Cabinet meeting held on May 11, it was also decided that a tax tribunal be established to facilitate dispute resolution arising from charging this levy.Le Roux said it was hoped that this process would speed-up the resolution of appeals, objections and other taxation complaints which can sometimes take several years to be heard before formal courts.Although several amendments related to land tax were made last year to the Agricultural (Commercial) Land Reform Act of 1995, the process has not yet reached full implementation stage.A Land Tax Bill is now also in the pipeline to prescribe the administration of the system.The Finance Ministry will be expected to bill land owners according to the valuation roll compiled by the Ministry of Lands, set dates for and accept payments, and take punitive action against those who fail to comply with the set regulations.Le Roux said the legislation had already been drafted and would probably be the final legal step before the levy can be formally instituted.The Agricultural (Commercial) Land Reform Act allows for land tax to be charged based on the value and size of the land.The law prescribes that Namibians be charged a rate of 0,75 per cent, while foreign and absentee landlords will be subjected to a rate of 1,75 per cent of the value of each hectare of undeveloped land.Resettlement beneficiaries who pay rent to the state for using the land, will not pay tax.The Lands Minister also holds the prerogative to grant exception upon application on the payment of land tax on commercial farm land.