The land question in smallholder development in South Africa - Institutional Constraints to Small Farmer Development in Southern Africa - page 205

VOC ( Vereenigde Oost-Indische Compagnie ). This tax was also described as a 'tithe' to the
extent that it represented a proportion of the income earned in the same way as the one
paid in Christian Churches, or 'zakaath' as in Islam. To this tax was added two more forms
known as 'transfer duty' in 1686 and 'recognition fees' that took effect in 1714. Citing
his earlier research (Franzsen, 1990), Franzsen (1992) revealed that another form of tax
known as the 'stamp duty on transfer deeds' also came into effect in 1714. The first violent
resistance of the indigenous Khoisan and amaXhosa against European settler occupation
and expansion took place between 1799 and 1803 and one is left to imagine whether there
was a link between the introduction of these taxes and local reactions (Morris, 2004).
Outside the Cape Province, taxes that affected the farming communities were also in
effect. For instance, in three of the political entities that later came under the umbrella of
the Union of South Africa, namely the Natal Republic, the Transvaal (then known as the
South African Republic) and the Republic of the Orange Free State, an elaborate system
of taxation was introduced to bring a broad spectrum of the citizenry within the tax net
(Franzsen, 1992). In these three Republics, taxes as diverse as transfer duty, stamp duty
on transfer deeds, hut tax, land tax, and property tax were imposed on the inhabitants
(Franzsen, 1992). An indication of the comprehensiveness of the tax system was the
existence of a tax on absentee landlords whose uninhabited dwellings were taxed, and the
hut tax which embraced subsistence farmers and the peasantry (Franzsen, 1992). In a review
of the literature on the land tax in South Africa in the period 1652-1994, Van Schalkwyk
(1995) adds that another purpose of the hut tax was to create a strong income need among
peasants that would motivate them to seek work in gold mines and sugar cane fields as
general labour.
As it became clear in the early 1990s that land reform was inevitable in South Africa and was
only a matter of time, conversation and debate ensued on the implications of introducing
a land tax in the country. One of the major concerns around the success of the land reform
programme was the potential cost to the government of implementing what would obviously
be a monumental undertaking in view of the large number of potential beneficiaries and the
amount of the land to be re-distributed. Experts reasoned that a tax on land would provide
government with enough resources to finance the land reform programme (Franzsen, 1992;
Van Schalkwyk, 1995; Katz Commission, 1998; DLA/DoA, 2005).
Evidently, Van Zyl and Vink (1992) did not share the enthusiasm of the those who think
land taxation will work and actually saw ample scope for immense administrative overhang
in a land tax in South Africa. Their conclusion that the introduction of a land tax in
South Africa would contradict international experience may have drawn largely from the
uniqueness of the structure of the agricultural sector with its sharp dichotomies and the
background of far-reaching state support applied disproportionately on the commercial,
large-scale agriculture sector that was largely white-owned.