Tuesday, January 10, 2012

PM extends deadline for land lease fees - The New Times, 30.12.2011

Prime Minister Pierre Damien Habumuremyi, yesterday, moved to clear the confusion surrounding the new land lease tax levied by the government, issuing new directives to clear all the irregularities cited by land owners.

The Premier convened a meeting with all concerned ministries and government institutions involved in the implementation of the new policy, which will see land owners in their respective categories, pay an annual lease fee on their land.

The new tax levied on land under the new tenure system enacted in 2005 whose implementation began last month has been a subject of controversy with landowners crying foul over the disparities involved in the payment and the limited time given to pay up.

The meeting at the Prime Ministers Office brought together Kigali City authorities, ministries of Environment and Natural Resources and Local Government, Rwanda Revenue Authority (RRA) as well as the Military and Police.

The PM directed concerned authorities to extend the deadline from December 31 to January 31 to allow people who haven’t completed registration of their land time more time.
All land owners were to face a fine after the expiry of the deadline.

“We need more time to create more awareness among the population about the importance of paying the lease fees. There is a need for clear assessment of the process to remove any irregularities.

“The government doesn’t want this to be seen as a burden on its citizens but rather a tax which is affordable to everyone. As a government, we put the needs of the citizens first,” Habumuremyi said, ordering an immediate assessment of the payment procedure.

Some of the key issues that have been raised include why the government would want to lease land to its “real owners” and the disparities between the lease fees paid in the various categories of urban and rural areas which  leave some at a disadvantage.

During the 9th National Dialogue, the issue of disparities in the fees was raised, with claims that needy families, especially in rural areas, could not afford to pay the lease fees while it was also said the some poor people living near developed neighbourhoods ended up in wrong categories.

The Premier directed district advisory committees to reassess in a period of one month the payment process and study all complaints to ensure that there are no disparities in taxes levied on the land vis-à-vis the incomes of the owners.

It was also resolved that the authorities look into the fees and come up with a minimum which is affordable for all land owners.

Under the 2005 Ministerial decree on land tenure, land owners are meant to pay a tax of Rwf 80 per square metre for residential land, Rwf150 for commercial land in all areas classified as urban areas while a tax ranging between Rwf50 and Rwf30 be levied on rural land.

The Minister of Natural Resources, Stanslas Kamanzi, said the issue of land tax has been misunderstood and blown out of proportion, observing that the situation is not alarming and the fees are not as high as alleged, compared to the value of land itself.

The Mayor of Kigali admitted that little was done to identify people classified as ‘poor’ or ‘needy’ whose land is next to neighbourhoods classified as ‘high end’, especially people who originally lived in the city.

It was also noted that the law was enacted when the country was still divided into prefectures with 11 provincial cities and later the administrative system was changed to district, meaning that land owners in the original ‘11 cities’ pay higher taxes than their counterparts in other towns across the country.

It was resolved that all land owners in rural areas with land that is not more than 2 hectares and used for Agricultural purposes should not pay taxes.

To avoid the concern of landowners paying tax on land that is not economically productive, it was agreed that all people with land in the city considered as “rural” and not more than 2 hectares, should not be taxed, unless the owner wants to change the land for commercial production.

City residents whose land is registered for residential purposes but is used for agricultural production were encouraged to consult with land registration authorities, the schedules will be communicated.

The Premier called on all concerned authorities to sensitise the population on the taxation procedures. The PM also directed authorities to reassess all land ‘categorised’ as wetland to ensure that some areas classified as swamps when they aren’t are declassified.

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