Scrapping further tax on farmland is one of the many proposals. Author of the report, Frouwien Bosman, said land taxation was considered during the transition years in the early 1990s as a mechanism to encourage land reform. But as a municipal land tax is already levied by local authorities, a further tax on land would be excessive and there is no guarantee that it would ultimately promote land reform.
She said the government’s reconsideration of a further land tax on farmland must be considered within the context of the total SA tax regime and contemporary challenges in the agricultural sector. Johan Pienaar, deputy executive director of economics and trade at Agri SA, also agreed with the report proposal. “There is no place for another tax in the farming sector,” Pienaar said, adding that land tax cannot be implemented because it will only duplicate the property rates tax that is already in the process of implementation.
Dr Chris Jordaan from TAU SA agreed that government should do away with additional tax. “Any more taxes in addition to existing taxes on water and services will mean that the farmer will just not be able to farm,” he said. However, he said it is unlikely that land tax will be scrapped. “It is a political move and government does not intend abolishing this tax as local government needs more money,” he said, adding that the lack of expertise in administering funds and human capital is the actual problem facing local government. “You can’t throw more money at a system that doesn’t work,” he said.
Pienaar said although some hard lessons have been learned with land reform, it is still an important process. “Some sanity has entered the picture,” he said, adding that this is a positive development in land reform. Bosman said clarity about the government’s exact approach to land reform will go a long way to lessen uncertainty in the agricultural sector. The report also said that although land reform remains one of the most pressing issues in the SA socioeconomic and political landscape, the process must be fair to all involved and ensure the continued effective utilisation of scarce farmland. – Staff reporter
