The constitution obliges the state to take reasonable measures ‘to enable citizens to gain access to land on an equitable basis’
The ANC dances, as a recent headline has it; Gwede Mantashe wants to do something about the zama-zamas but doesn’t know quite what; the EFF still punts the failed old soviet model aided and abetted by the Marxist moles in government who have withheld title deeds from land reform and restitution beneficiaries for the past 20 years. And the private sector slams as sabotage of the constitution the ANC’s latest move to give the executive the power to determine compensation for expropriations.
What is needed is something that addresses, once and for all, the fundamental inequity of our situation or, as Cyril Ramaphosa put it, the “original sin” of massive, and centuries old, land dispossession. None of this will come near giving effect to the preamble to the constitution which states that “SA belongs to all who live in it.” Unless we genuinely set out to achieve this we are fooling ourselves, merely playing charades like the ANC.
In any event, it stands to reason that if you charge land value rentals and lower tax, inefficiently used or speculatively held land will either be developed or come to market. So you have a double whammy: land becomes more affordable and the economy gets a kick-start. It then gets better: as taxation gradually reduces and land rent rises those areas with minimal locational advantage , which have been taxed out of business, can resume normal economic activity.
What about the zama-zamas? As a proxy for land rent collection the gold mines tax formula was effective inasmuch as, simply put, it taxed richer mines at a higher rate than marginal mines which, if their operating margins were below 10%, paid no company tax. This made it easier for marginal mines to survive periods of low commodity prices while taxing richer mines at a much higher rate in boom times.
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