Land minister proposes tax rate decrease in both commercial and communal land
The Minister of Land and Reform Utoni Nujoma last week proposed for the approval for the Land Tax to 0.4% from its current 0.75% for locals and 1.4% from its current 1.75% for foreign nationals for the first piece of agricultural land owned.
Speaking in the National Assembly, Nujoma further proposed that the progressive rate of land tax for additional farms owned by the same owner to remain the same as before at 0.25% in either case.
Nujoma said that the need for a decrease in land tax is together with the objectives of having instituted Land Tax as an instrument of Land Reform and to maintain uniformity and fairness. Nujoma said that his ministry has sought the concurrence of the Ministers responsible for Finance and Agriculture, Water and Forestry before taking the proposal to parliament.
The current rates of land tax were last determined and approved by this August House in 2004 on the basis of nationality and the number of farms owned by an individual. The rate of land tax for Namibian nationals was set at 0.75% and that of foreign nationals at 1.75% for the first farm owned respectively. The rate of tax for additional agricultural land that is owned by the same individual was progressively set at 0.25% in either case.
Nujoma said that if the rates are not revised the price at which the government will be purchasing land in the future will be high because land owners are likely to inflate the offer prices in order to recover the cost of a high land tax.
“This has the potential of negatively affecting the current Land Reform programme target of acquiring 5 million hectares by the year 2020. Similarly, as you are aware, 10 million hectares are to be acquired through the Affirmative Action Loan Scheme by the year 2020,” the minister added.
If the proposal is granted, the rate of land tax for the first, second, third, fourth, fifth and sixth piece of agricultural land owned by a Namibian national would be 0.4%, 0.65%, 0.9%, 1.15%, 1.4% and 1.65% while that for a foreign national would be 1.4%, 1.65%, 1.9%, 2.15%, 2.4% and 2.65% respectively.
Nujoma said the increase in land tax at the proposed rates would be 88% for Namibian nationals and 109% for foreign nationals.
“This is deemed to be fair and reasonable considering that on average the new Unimproved Site Values increased by 300- 400%. At the proposed land tax rates of 0.4% for Namibian nationals and 1.4% for foreign nationals respectively progressively increasing at 0.25% for additional agricultural land owned by the same owner, the annual amount of land tax that is expected will be N$80 million. This amount is twice the current amount that is supposed to be collected annually in terms of land tax if all the Land Tax was paid,” Nujoma added.