Monday, August 29, 2016

TAX ALL LAND TO PREVENT ENCROACHERS

This week top clergymen form the Church of Uganda were nearly lynched by an irate mob while on a tour of land the church owns that has been allegedly encroached by hundreds of residents.

Soon after the harrowing incident, the church announced plans to lease out their land about 80 square kilometers dotted all over the country as way to prevent encroachment.

If ever there was a sign that things were getting out of hand it had to be this one. That residents can attack men of the cloth, pelt them with stones and threaten to send them to a fiery death, what more can be said?

"We take land for granted in Uganda because there is actually too much of it lying around. Believe it or not there is no land pressure in Uganda. Apart from the aforementioned unutilised land evidence can also be seen in how we build – mostly bungalows and how there is always idle land for encroachers to settle on....

It is a moot point but how a people handle land will determine their level of development. Because land is where all wealth is derived from. More directly it is where we grow our food, where we build our homes. Indirectly assets like shares are derived from companies, which seat on land to operate.

To the extent that your land property rights are not well defined is the extent to which you can or cannot extract value from the land.

Think of a person occupying land without a title. He will not build a permanent abode on it knowing that the rightful owner can come a long anytime and repossess. He will not cause developments like roads, water and power networks because his ownership is unsure. That means the value of the land is not rising, in fact it is depreciating since the illegal tenants are an encumbrance on the land.

In the event that the illegal tenant is foolhardy enough to invest heavily on the land, attempts to dispossess him will inevitably turn bloody as he has no recourse to the law to defend his “right” to the land.

We have somehow been blundering around with our unclear land situation for a while, but day by day issues are coming to a head as land pressures mount.

"The move by the Church of Uganda to lease out their land is confirmation of what I have always argued. That to put our land to productive use the landowners need to be compelled to do so. Church of Uganda has been compelled by the threat of encroachers to release the land to more productive entities, but I argue all land should be taxed – farm, residential, commercial and industrial...

As it is now landowners are content to live their land unproductive, even in the city center, as they raise funds to develop it. In the process denying people work and the society the benefit of the products or services that would be generated if the land was activated.

Tax all land so that the owners will scratch their heads to be more productive and pay off the tax or failing to do so lease the land to more productive agents – as the Church of Uganda is doing now.

Uganda is a big coffee and tea growing nation because the colonialists compelled the farmer, using the poll and hut taxes, to grow coffee. Our forefathers did not grow coffee out of some great consensual vision but by compulsion.

"But to tax the land we need to invest in identifying and registering all the land in the country. And we need to brace ourselves for the fight from landowners, whose honeymoon will come to a crashing end and those people – read squatters, who are benefitting from the current ambiguous state of affairs...

But the tax will benefit everyone concerned.


The land owner will make more income whether he puts it to use or leases it out. Tenant will have more secure tenure. The government will see an immediate spike in revenue collections. And the economy as a whole will benefit from greater productivity.

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