Will ratepayers take the strain of new Municipal Rates Amendment Bill?

Criticising the Municipal Rates Amendment Bill, Mr Parks Tau, Johannesburg City Executive Mayor, spoke about its impact on the domestic ratepayer and city budgets. Exemption from rates was in the public service interest. The Bill would shift R400 million per annum from government to the ratepayer. The impact amounted to a R1.2 billion cut in the budget by R1.2 billion per annum. The contribution of business had to stay the same. Over the last few years the burden of taxes had shifted to residents. The draft rate ratio proposed to reduce the rate-in-the-rand for government properties to 25% of the residential rate.

The Department of Cooperative Governance and Traditional Affairs was confronted with the question: did it accept that business and residential ratepayers would have to take the strain if this happened?

In its reply, CoGTA replied that municipalities differed in their rating and some municipalities made Public Service Infrastructure (PSI) expensive by charging four times more for state owned properties. "It will not do for municipalities to make the state a cash cow". Rating of PSI would be phased out over three years. The global economy had to be kept in mind. Elsewhere there was not PSI rating. The powers of municipalities to categorise would not be usurped but there did have to be equity.