ZIMBABWE is set to start taxing beneficiaries of its land reform programme, as the government tries to expand its revenue base, which has been shrunk by low employment levels and struggling businesses.
Fifteen years after the much maligned fast track land reform programme, the southern African country says it expects to collect $22 million from the black farmers who were resettled, in what was seen as a largely populist programme, as President Robert Mugabe faced the stiffest opposition to his then 20 year rule.
The development levy shall be used to meet expenditure on the projects within the rural district council area
The new farmers, most who are struggling and are heavily reliant on government for inputs and subsidies, are now expected to pay quarterly rents and development levies to government.
Mugabe signed into law the Finance Act, which states that resettled farmers with permits and 99-year leases – approximately 300,000 of them – are expected to pay rent and a development levy.
According to the act, the levy will be used to set up infrastructure like schools, clinics, dip tanks and roads, among others but sceptics fear the government is hamstrung by a crippling liquidity crisis and is desperate to open new revenue streams.
The levies range from $10 rental levy per year and a $5 development levy.
“The development levy shall be used to meet expenditure on the projects within the rural district council area from which the levy was collected,” reads part of the new law.
“The projects include gully reclamation and other works related to soil conservation and prevention of soil erosion, provision, operation and maintenance of hospitals, clinics, dispensaries and schools and other educational institutions, facilities and amenities connected therewith.”
Despite the government describing the land reform programme as a success, local banks and financial institutions are still refusing to accept, as collateral, the 99-year lease agreements, despite authorities announcing last year that the document is now bankable and could be used in loan applications.
Local farmers are struggling to stay in business, with a majority of them greatly affected by high cost of farming.
Faced with growing opposition to his rule, Mugabe, at the turn of the millennium, embarked on a chaotic and bloody land reform programme, driving off white commercial farmers to make way for landless blacks, mainly supporters of his ruling Zanu PF party.
Source: The Africa Report