Free State Agriculture (FSA) announced on Tuesday it is to take a local council to court over its imposition of land tax.
Louw Steytler, president of the farmers’ union, said if the Nketoana council in the eastern Free State should not revoke the new tax, FSA and the Agri Nketoana Forum, representing farmers, would seek a court interdict against it.
”This was not an easy decision, but it is the result of unsuccessful negotiations with the municipality and provincial government,” Steytler said.
Nketoana municipality includes the districts of Reitz, Petrus Steyn, Lindley and Arlington.
It was to be at the centre of a test case, with other municipalities countrywide keeping an eye on proceedings, FSA manager Pieter Moller said on Tuesday.
Nketoana farmers were worried that the new tax of two percent was imposed merely to pay the local council’s overdue debts, amounting to around R9-million.
The farmland levy was to provide an additional R9,1-million to municipal coffers this financial year, Moller said.
Nketoana recently started billing farmers for the new land tax.
After negotiations between FSA, premier Winkie Direko and MEC for local government and housing Lechesa Tsenoli, the imposition of the tax was put on temporary hold.
Direko ordered Tsenoli during the meeting on March 3 to mediate between farmers and the municipality to resolve the dispute.
However, the municipality last week announced that it was to proceed with imposition of the tax with interest, Moller said on Tuesday.
Tsenoli had failed to communicate with either the municipality or FSA over the matter, Moller said.
”This was a clear indication to both parties that provincial government did not intend to interfere.”
Nketoana levied the tax in terms of a 1962 ordinance, which provides for property tax in municipal areas.
FSA maintained that the intention of this ordinance at the time was not to include farms.
Steytler said Nketoana farmers could not afford the additional two percent tax. It might irreparably damage the region’s agriculture-based economy.
”It will cause bankruptcies among farmers and further unemployment among farmworkers, already hard hit by the effect of new minimum wage regulations.”
Also, no meaningful debates over the issue could take place because Parliament had not yet approved the proposed Property Tax Act.
”Our position is clear. We shall not pay any land tax this year because there are no guidelines yet from the Department of Finance,” Steytler said. ‒Sapa