South Africa: 'Unutilised Land' to cost farmers as state prepares farm tax proposals

Discussions were far advanced within the government on a proposal to introduce a land tax, Land Affairs Minister Lulama Xingwana said yesterday.

Such a tax would act as a disincentive for landowners to hold on to vast tracts of unutilised land, would push down land prices and assist the government's bid to fast-track its land reform programme, the minister said.

Farmers are strongly opposed to the idea on the grounds that it would increase the cost of farming and contribute to inflation.

Land affairs director-general Thozi Gwanya, who briefed Parliament's joint budget committee on the land reform programme, said discussions had taken place with the t reasury, the South African Revenue Service (SARS) and the provincial and local government department.

The treasury's view was that the tax would have to be aligned with property taxes to prevent double taxation.

"The land tax is aimed at discouraging the ownership of vast tracts of unutilised land," Gwanya said. Once the discussion paper had been finalised it would be taken to the cabinet.

"It is still at a discussion stage. We are still talking," Xingwana said.

Policy and draft legislation had also been developed to regulate the purchase of land by foreigners.

The department had followed international precedent on this, Gwanya said. He said foreign land purchases pushed up land prices to levels that were unaffordable for South Africans.

The US, for example, prohibited land ownership by foreigners unless they had stayed in the US for at least 10 years.

A clear policy to regulate the use of agricultural land for game farms was also required as the increasing conversion of land for game farms was adding to landlessness and unemployment.

Xingwana said foreigners converted agricultural land into golf courses and game parks. "It affects our food security and the amount of land available for agriculture."

Furthermore, golf courses consumed a lot of water.

The minister said the Land Use Management Bill, once enacted, would empower the government to regulate the golf courses. "In my view we have enough golf courses for our purposes," Xingwana said.

The willing buyer, willing seller principle of land acquisition also needed to be urgently reviewed to accelerate land reform.

Xingwana said the price of land was rising because everyone knew the government had to buy land for land reform and restitution.

As part of the review of the principle, the government would consider the injunction of the constitution that state investment in land through the Land Bank be considered when determining the price. The government had invested large amounts in agriculture over the years.

Gwanya told the committee that after 14 years, the pace of delivery of land reform was very slow and the results were mixed, especially in the area of post-settlement support.

"The 30% target set (for the transfer of agricultural land to blacks) has resulted in more emphasis being placed on hectares to be delivered and less on sustainability.

"Only 49% of projects (delivered so far) are able to claim tangible results with regard to agricultural production and beneficiary livelihoods."

Past land reform initiatives focused on land acquisition and not enough on support to ensure the land was used productively.

Only 4,8-million hectares of the 82-million hectares of agricultural land available in the country had been transferred to black hands, which left about 19-million hectares that still had to be transferred if the government was to meet the 30% target by 2014.


Source: allafrica.com

Publication date: 11/17/2008

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