Cabinet okays new land rentals

via Cabinet okays new land rentals | The Herald July 9, 2015

Big firms and transnational corporations that own estates and plantations in the country will have to pay up to $1 million in annual land rentals after Cabinet approved a land rent of $10 per hectare.

The move is likely to force some of them to give up underutilised land and free up more space for resettlement.

Lands and Rural Resettlement Minister Dr Douglas Mombeshora yesterday said the new rents would be charged with effect from January this year.

Government has since started collecting land rentals from communal and commercial farmers who benefited under the land reform programme after Cabinet approved rentals for both A1 and A2 schemes.

A1 farmers pay $15 per annum in rental, while their A2 counterparts are now paying $5 per hectare per annum.

Dr Mombeshora said estates and plantation owners who pay the rental will be given security of tenure documents such as leases and permits to enable them to make long-term investments.

He revealed that wildlife conservancies were not covered under this new land rental regime.

The new land rental regime will see companies such as Lowveld sugar producer Tongaat Hulett paying close to $1 million per year.

The sugar producer owns about 86 000 hectares in the Lowveld with 29 000 of these under sugarcane while the remainder is undeveloped dry land used mainly for cattle ranching.

Previously, these big companies were only paying a unit tax of about $3 per hectare per annum to local authorities in areas they are located.

Dr Mombeshora said these companies could not continue using State land for free.

“Cabinet recently agreed to charge a land rental of $10 per hectare per annum on big companies and transnational companies who own vast tracts of land such as estates and plantations. They must have paid their dues by the 31st of December every year,’’ he said.

“We realised that these companies could not continue to use our land for free and those who pay their rentals will get their leases or permits that allow them to continue operations on that piece of land,’’ he added.

Dr Mombeshora said its Government which has the prerogative to decide what to do with its land since all the land in the country is owned by the State.

He said giving security of tenure documents to these companies would spur them to make long term investments that would engender economic benefits to the country.

“We have not yet agreed on the amount of money that will be paid by conservancies as of now,’’ added Dr Mombeshora.

He expressed optimism that his ministry would meet its annual target to collect over $22 million in land rentals.

Part of the money would be used to compensate white former commercial farmers who lost the land they held during the land reform programme with some going to finance periodic land audits to ensure full land use.