13 February 2018

Namibia: Farmers Sue to Halt Land Tax

Two owners of farms in the Omaruru and Gobabis districts yesterday asked the High Court to stop the levying and collection of tax on commercial agricultural land while a legal challenge about Valuation Court proceedings that took place in 2016 remain pending.

The Valuation Court proceedings in 2016, during which farm owners' objections against a new valuation of commercial farms were considered, was flawed, and the certified valuation roll in which farm values are recorded for the purpose of assessing land tax is completely defective and a nullity in law, farm owners Traupe Farming CC and the company Mapan Boerdery are claiming in an urgent application argued before deputy judge president Hosea Angula.

The close corporation, which is the registered owner of three farms in the Omaruru district, and Mapan Boerdery, which owns a farm in the Gobabis district, are claiming that as a result of the flaws in the Valuation Court's proceedings, there is no valid farm valuation roll on which assessments for land tax can be based.

They are also claiming that there is no obligation for farm owners who raised objections against the farm valuations that the Valuation Court was supposed to consider to now pay land tax on assessments based on the allegedly invalid valuation roll.

Deputy judge president Angula reserved his ruling in the matter after hearing oral arguments from senior counsel Andrew Corbett, representing Traupe Farming and Mapan Boerdery, and Kaijata Kangueehi, representing the minister of land reform, in the Windhoek High Court yesterday. He said he would deliver his ruling on Wednesday next week (21 February).

Farmer Christian Traupe informed the court in an affidavit that his close corporation and Mapan Boerdery, of which farmer Gustav Holz is the sole shareholder, in March last year filed a High Court application in which they are asking the court to review and set aside the Valuation Court proceedings and rulings dating from September, October and November 2016.

Their review application, which Traupe said is being supported by more than 1 100 other owners of commercial farms in Namibia, is still to be heard and decided.

According to Traupe, the provisional farm valuation roll that the Valuation Court had to consider in 2016 contained blatant mistakes that rendered the tax to be levied by government unaffordable. He said it was suspected that the valuer who compiled the valuation roll and his staff largely ignored the crucial factor of the carrying capacity of the farms whose taxation value they had to determine.

The Valuation Court did not comply with a regulation requiring it to give reasons for its decisions, did not at all times consist of four members as required by another of the Land Valuation and Taxation Regulations issued under the Agricultural (Commercial) Land Reform Act, and failed to appreciate the nature of its legal duties and to apply its mind properly, Traupe Farming and Mapan Boerdery are also claiming.

Corbett reminded judge Angula that the farm owners objecting to the valuation of their farms have indicated to the Ministry of Land Reform that they support the government's land reform process, provided it was implemented fairly, and were committed to paying land tax to finance land reform. However, in order for commercial farms to remain productive, the land tax levied had to be fair, reasonable and affordable, the land owners have stated.

In an answering affidavit also filed at the court, land reform minister Utoni Nujoma said the owners of commercial farms in Namibia received a reduction of 40% in the newly assessed value of their farms from the Valuation Court, and he also reduced the rate of the tax levied on farmland, lowering it from 0,75% of the value of a first farm owned by a Namibian to 0,4%, while the tax rate on a second farm owned by a Namibian was lowered from 1% to 0,65%, and the tax rate on a third farm owned by a Namibian was cut from 1,25% to 0,9%.

Traupe Farming had to pay N$15 971 in land tax annually on the three farms, comprising more than 17 000 hectares, owned by it before the new valuation and tax rate came into force, and would now have to pay annual land tax totalling N$33 338, Nujoma stated.

He disputed that the two applicants were acting as spokespersons for more than 1 100 fellow land owners, and charged that the two applicants do not support the land reform process, and have been trying to block the land tax since 2013 by taking the Ministry of Land Reform to court "at every turn".

Nujoma also stated that in terms of the Land Valuation and Taxation Regulations, a pending appeal against decisions of the Valuation Court would not prevent land tax from being assessed and levied. Farm owners would have to pay their land tax even while challenging the Valuation Court proceedings, he indicated.

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