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Proposed tax on unused land could force sales

Monday, 09 July 2012   (0 Comments)
Posted by: SAIT Technical
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By Hopewell Radebe (Business Day)

A PROPOSAL for a tax on underused land could be included in the Green Paper on Land Reform that, if accepted, could force landowners and beneficiaries of the government's land distribution programme to surrender their land if they are unable to use it.

The tax was debated at the Birchwood Resort in Boksburg, Gauteng, on Friday morning by stakeholders including farm workers, agribusiness organisations and farmers' lobby groups.

They discussed the proposal made by the government's land management subgroup, set up to find ways to help people keep their agricultural land productive and avoid compromising national food security.

One of the aims of the green paper is to give state institutions the teeth to punish those who leave land idle. These institutions would monitor all activities associated with the management of land and natural resources to ensure they are sustainable and fulfil political objectives.

Although it does not provide details on tax collection, the document argues in favour of taxing unproductive land. "If, for any reason, the land is not being utilised, the tax burden will be a mechanism for ensuring that the problem is addressed," it says.

However, it also accepts that not all land is left deliberately idle, as some government land projects are halted due to a lack of support, finance or farming expertise.

Lindie Stroebel, manager of economic intelligence at the Agricultural Business Chamber, said the criteria to determine whether land was underused should be crafted carefully as they could be challenged in court.

She said experienced farmers knew that portions of land should at times be allowed to rest for a season or two so that it could recover. Livestock farmers also rotated their animals between camps to avoid overgrazing.

Rural Development and Land Reform Minister Gugile Nkwinti said the proposal still had to find a way of dealing with communally owned agricultural land, as a land tax could unfairly affect the livelihood of rural communities.

The green paper also argues that a land tax would help landowners become innovative and entrepreneurial by motivating them to use the government's various support mechanisms.

The tax burden could also force owners to sell their land on the open market and perhaps provide the government with the first right of refusal, or to consider subletting the land to productive farmers.

It proposes raising the level of ownership among land beneficiaries to allow legal subletting, which would be a source of income for the owners and give more producers access to land.

During Friday's debate, there was also a call for more research on the definition and evaluation of the term "productive use".



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