South Africa

Tax revolt against South African municipality

The eThekwini Rate Protest Movement will not stop until residents of the metro see good governance and an end to the misappropriation of their funds.

This is according to the Westville Ratepayers Association (WRA) in response to questions from Daily Investor.

The WRA and other local organisations have withheld approximately R1.2 million from the eThekwini Metro since 31 July, which has been deposited into a holding bank account for safekeeping.

This comes after the eThekwini Metro announced an electricity tariff hike of 21.91% earlier this year.

While this hike was later rejected and lowered to 18.94%, it was still higher than the Nersa-approved national hike of 18.49%.

Following the announcement of this hike, the WRA lodged a Section 102 dispute with the metro, claiming the hikes following a non-compliant public participation process, News24 reported.

The publication said the dispute was also lodged in light of the municipality’s failure to recover unauthorised, wasteful expenditure of R427 million in the 2021/2022 financial year and a R50 billion loss over five years.

The WRA told Daily Investor that the amount withheld from the metro consists of rates, water and electricity tariffs.

It added that it is important to clarify that “the amounts being withheld are not strictly ‘tax’ or, as in the case of property-related discussions ‘rates’”.

They specified that this is not a “boycott”. Instead, “it is a lawful dispute lodged under Section 102.2 of the Municipal Systems Act”.

“The word boycott implies that we are not honouring our bills. We are paying our bills,” the organisation said.

“We just aren’t paying them to the city until such time as we can trust them to manage our money appropriately.”

“Our objective is to finally see good governance and the end of this normalised state of misappropriation of our funds.”

The WRA handed over a letter of demands to eThekwini mayor Mxolisi Kaunda on 10 August 2023, which he signed.

The demands listed in the letter are as follows:

  • The 2023/2024 tariff be set aside backdated to 1 July 2023
  • Renegotiate the 2023/2024 tariff increase, which is affordable to everyone
  • Undertaking and a comprehensive plan of action to tackle misappropriation and irregular expenses
  • Immediate stop to electricity disconnections unless prepaid meters are installed
  • Immediate establishment of the Rates Appeals Board
  • All rate increases on properties on appeal be set aside, backdated to July 2022
  • All credit agreements must be reviewed, and a moratorium placed on all interest on overdue accounts
  • A simplified bill
  • Regular, accurate readings as per legislation. Estimate billing needs to stop
  • Registered ratepayers over 65 with arrears to be written off
  • Oversight board between the Ratepayers and Ethekwini be set up within 14 days from today

According to the WRA, the metro has been willing to engage with the organisation, “but since our last engagement with them on 17 August, we have yet to see a resolution to our demands”.

In response, the metro has issued a press release following a meeting with the uMhlanga Ratepayers and Residents Association, which is not involved in the eThekwini Rate Protest Movement.

Kuanda said this meeting “indicates that we all have the best interests of the City at heart. We want to assure you that we are working tirelessly to make eThekwini a preferred destination for investment and tourists”.

“The Mayor further clarified the issue of electricity and water tariffs and reported to ratepayers that Council took a resolution last week to revise the electricity tariffs to 15.1% in line with the NERSA ruling,” according to the press statement.

Regarding water tariffs, Kaunda said the increase in water tariffs was necessitated by the decision to build the new Umkhomazi Dam to improve the city’s water supply.

“The need for what we are doing has become more necessary than ever before,” the WRA said.

“We can see the state of not just our municipalities – but our country at large – and we are now trying to salvage what little we have left with the only mechanism available to us – the safekeeping of our public funds.”

The matter will be before the court on 1 November 2023. WRA chairperson Assad Gaffar told 702 that this would be for protection against the disconnection of services of anyone who is a part of the movement.

Daily Investor contacted the eThekwini Metro but received no response before publication.


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