Land tax system challenged

Namibian By Werner Menges 04 September 2013

THE land tax that has to be paid by the owners of commercial farms in Namibia is unconstitutional, it is being argued in a case filed in the High Court in Windhoek.

THE land tax that has to be paid by the owners of commercial farms in Namibia is unconstitutional, it is being argued in a case filed in the High Court in Windhoek.

With a constitutional challenge to the land tax system pending in the High Court, the planned session of the Valuation Court, which has to consider objections raised by farm owners against the official tax valuation of their farms, should be suspended, a farm owner is asking in an urgent application lodged with the High Court on Monday.

The urgent application is due to be heard on Monday next week.

Judge Elton Hoff postponed the hearing of the case yesterday, after Government Attorney Matti Asino asked him to be given time to enable his clients to present their side of the matter to the court.

In the urgent application – and also in the constitutional challenge – a close corporation that owns a farm in the Waterberg area of the Otjozondjupa Region, Kambazembi Guest Farm CC, is suing a list of respondents that include the minister of lands and resettlement, the minister of agriculture, water and forestry, the minister of finance, the attorney general, and the chairperson of the Land Reform Advisory Commission.

The close corporation, represented by its sole member, Joachim Rust, is asking the court to declare the sitting of the Valuation Court, which was scheduled to start on Friday last week and to continue until the end of next week, to be null and void.

In the alternative, the court is being asked to suspend the proceedings of the Valuation Court until the constitutional challenge lodged by the close corporation on 22 August has been heard and decided.

In the constitutional challenge Kambazembi Guest Farm CC is asking the court to declare sections of the Agricultural (Commercial) Land Reform Act of 1995 unconstitutional, and also to declare the Land Valuation and Taxation Regulations issued in terms of the Act as unconstitutional.

In terms of the sections of the Act being challenged the minister of lands, with the concurrence of the ministers of agriculture and finance, is given the responsibility of determining the rate at which land tax is to be levied on commercial farm owners. That delegation of power to the ministers is inconsistent with the constitutional separation of powers, the principles of democracy, and the rule of law, Rust is arguing in an affidavit filed with the court.

The Act also states that once the land tax rate has been determined by the three ministers it should be approved by the National Assembly. No indication that the National Assembly has given this required approval could be found, according to Rust.

He stated in an affidavit filed as part of the urgent application on Monday that “it seems clear that the land tax is in essence a ministerial tax, and that the legislature provided for in the Constitution, abdicated a function reserved to it resulting in the unconstitutionality of the land tax”.

The sections of the Act that are being challenged, and also the regulations published in terms of the Act, “are invalid because they are inconsistent with the constitutional principle that taxation is reserved for the legislature, not the executive,” Rust also claims.

Senior counsel Pieter Henning, who is representing the close corporation, argued before Judge Hoff yesterday that the entire land tax and the enforcement that goes with it are inconsistent with the Constitution.

Henning also argued that what has been referred to as a Valuation Court has not been such a court at all.

He charged: “It commenced on Friday as a supreme disaster. It continued yesterday as a supreme disaster. Its destination is a disaster. It’s irregularity upon irregularity.”

In the absence of an official from the Ministry of Agriculture who had been appointed as one of the four members of the court – the official was absent without any explanation from the court proceedings on Friday and on Monday – no Valuation Court is in existence, Henning argued. As a result, no postponement of the court’s session to Monday next week could have been ordered either, he argued.

“Irregularity upon irregularity,” he said. “Why proceed with this unconstitutional, illegal process?”

The only solution is that the Valuation Court’s proceedings must be suspended, and that the constitutional challenge must be heard and decided first, he said.

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By Gerrit Vermeulen