Efforts to tax agricultural land seem increasingly part of a greater plan to target the country’s farmers, Free State Agriculture said on Wednesday.
President Louw Steytler said efforts to levy a municipal tax on farmland persist while the agricultural industry is experiencing a drought crisis.
”Farmers seem to be targeted as a special group who must be singled out as villains,” he said.
He denied the ”lie” that farmers refuse to pay taxes.
”The farming community has repeatedly committed itself to cooperate so that a tax obligation can be formulated to suit both sides,” Steytler said.
Free State Agriculture recently funded farmer Hendrik Boshoff’s successful application in the Bloemfontein High Court to set aside a municipal tax of 2% that was levied on his farms. It was widely regarded as a test case for both local authorities and farmers.
Judge President JP Malherbe ruled against Boshoff’s municipality, Nketoana, finding it did not comply with the required legal procedures for instituting such a tax.
During the proceedings, Boshoff chose not to persist with attacking the constitutionality of the Nketoana tax. He merely focused on the procedural mistakes made by the municipality.
Nketoana interpreted Malherbe’s judgement as its own ”victory in principle”. Its attorney, Andre Podbielski, maintained on Wednesday that Boshoff in effect conceded that a municipality has the legal (including constitutional) powers to levy a tax on farmland.
Nketoana now plans to correct its procedural mistakes and then proceed with instituting the new tax, Podbielski said.
Steytler denied that Boshoff conceded the municipality’s powers to tax farmland. He merely decided not to proceed with arguments on the constitutional issues because Nketoana’s procedural mistakes were so gross, Steytler said.
”It did not seem necessary to place the constitutional aspects under investigation in this case. A court shall definitely be asked later on to rule on it.”
Steytler added that organised agriculture does not want to ask for a court ruling on the constitutionality at this stage. The reason is that it is still using ”democratic instruments” to settle the matter.
He was referring to government’s drawing up of a new Act to regulate the power of a municipality to impose rates on a property. The 19th and latest concept Bill was published on March 18.
Organised agriculture, among others, is providing inputs during this process.
The national Treasury earlier sent a letter to municipalities asking them to keep the taxing of farm and mining land on hold until the new Act has been approved by Parliament.
Farmers argue that a tax on farmland could destroy the economic viability of a considerable part of their industry, including recently settled black farmers. They further maintain that they should in any event not be forced to pay property rates on land used for production purposes. — Sapa