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Land tax brings in millions

Land tax brings in millions

GOVERNMENT raked in an impressive N$27,9 million through land tax on commercial farms last year, Lands Minister Jerry Ekandjo announced this week.

Addressing the Ministry’s top management at a strategic workshop at Okahandja, Ekandjo said 15 farms totalling 119 686 hectares were acquired by means of the willing-seller, willing-buyer principle over the same period at a cost of N$15,3 million. Yet only 25 families (about 150 people) were resettled on former commercial farms in different regions last year.The purchase of the farms was regarded as an improvement considering that for the first 15 years, the Namibian Government bought 145 farms with a combined area of 932 864 hectares for N$130,7 million.Government has complained that the price of land has increased 200 per cent since 1990.Only about 1 538 families have been resettled on freehold land and 4 352 families in the communal areas.A land tax was introduced in 2004, with citizens paying 0,75 per cent of the value of undeveloped land for the first farm.This percentage increases 25 basis points for every farm.Foreigners are taxed at 1,75 per cent for the first farm and 0,25 per cent for every additional farm.Ekandjo had said that they hoped to raise R28,2 million in revenue through land tax last year.Last year the Namibian Economic Policy and Research Unit (Nepru) warned that the tax on farmland could have an unforeseen and long-lasting impact on the property market.Nepru said a closer look at the concept showed that the implementation of the tax could place farmers in a tight corner, prompting them to do away with less profitable farming operations.”In some cases the added tax may be enough to convince a farmer of a marginal farming business to place his or her property on the market, where the Government has first option to purchase the farm for redistribution.”This is a process that will require monitoring, since the effect of crowding out domestic marginal farmers clearly runs counter to the Government’s aims of helping disadvantaged smallholders,” added Nepru.Government complained that bureaucratic red tape was holding back the land-reform process.Lands Permanent Secretary Frans Tsheehama said last year the procedures that needed to be followed before Government could acquire a farm were the prime cause of the delay.As a result, said Tsheehama, land offers received could not be adequately assessed on time.Ekandjo complained at the Okahandja meeting that limited financial resources were one of the major constraints they faced and they had to drop some of their plans.The four-day ministerial planning meeting looked at progress made and challenges faced last year and discussed a new plan for this year.It also discussed a new five-year strategic plan (2006-2011) and ways to achieve their goals.The meeting ends tomorrow.Yet only 25 families (about 150 people) were resettled on former commercial farms in different regions last year.The purchase of the farms was regarded as an improvement considering that for the first 15 years, the Namibian Government bought 145 farms with a combined area of 932 864 hectares for N$130,7 million.Government has complained that the price of land has increased 200 per cent since 1990.Only about 1 538 families have been resettled on freehold land and 4 352 families in the communal areas.A land tax was introduced in 2004, with citizens paying 0,75 per cent of the value of undeveloped land for the first farm.This percentage increases 25 basis points for every farm.Foreigners are taxed at 1,75 per cent for the first farm and 0,25 per cent for every additional farm.Ekandjo had said that they hoped to raise R28,2 million in revenue through land tax last year.Last year the Namibian Economic Policy and Research Unit (Nepru) warned that the tax on farmland could have an unforeseen and long-lasting impact on the property market.Nepru said a closer look at the concept showed that the implementation of the tax could place farmers in a tight corner, prompting them to do away with less profitable farming operations.”In some cases the added tax may be enough to convince a farmer of a marginal farming business to place his or her property on the market, where the Government has first option to purchase the farm for redistribution.”This is a process that will require monitoring, since the effect of crowding out domestic marginal farmers clearly runs counter to the Government’s aims of helping disadvantaged smallholders,” added Nepru.Government complained that bureaucratic red tape was holding back the land-reform process.Lands Permanent Secretary Frans Tsheehama said last year the procedures that needed to be followed before Government could acquire a farm were the prime cause of the delay.As a result, said Tsheehama, land offers received could not be adequately assessed on time.Ekandjo complained at the Okahandja meeting that limited financial resources were one of the major constraints they faced and they had to drop some of their plans.The four-day ministerial planning meeting looked at progress made and challenges faced last year and discussed a new plan for this year.It also discussed a new five-year strategic plan (2006-2011) and ways to achieve their goals.The meeting ends tomorrow.

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