19 August 08

By Tiro Mahlakoleng

TRANSFORMATION in Mogale City Local Municipality has shifted to a higher gear following the City’s completion of its draft Rates Policy.

The new rates policy is a requirement of the Local Government: Municipal Property Rates Act (MPRA). The Act calls for a transparent and fair system of granting relief, rebates and reductions of property rates levied on consumers, through the establishment and implementation of a municipal rates policy.

Property rates have, in the past, proved to be one of the main sources of revenue for municipalities across the country, enabling them to render essential services to their residents efficiently. Property owners are usually billed monthly for total municipal services consumed; the total amount payable by the consumer includes property rates, which are also known as rates and taxes.

Revenue generated from property rates is strictly used for service delivery and enables the municipality to develop and maintain transport infrastructure, build public libraries and recreation facilities, provide sanitation, install lights and undertake environmental management, among other services. According to Pelekelo Mwiya, Mogale City’s valuation manager, “revenue generated from property rates is never used for salaries but goes directly into the service delivery coffers”.

The City has crafted a draft Rates Policy, which is open for public comment until 30 September. As with all other public regulations, a public participation process has to be in place that allows citizens to be involved in the formulation of policies that affect them.

Residents, investors and other groups have been urged to read the policy and comment on it, as it affects them directly or indirectly. It will not only act as a cornerstone for levying properties in Mogale City, but will ensure that impoverished residents and low-income earners are granted relief or rebates from property rates.

In terms of the Constitution, a municipality may impose rates on properties in a way that does not prejudice national economic policies, economic activities across municipal boundaries or national mobility of goods, services, capital or labour. Mwiya, who is behind the formulation of the policy, said: “The policy document will inform the municipality on how to levy property owners and is premised on the principles of equity, affordability, poverty alleviation, socio-economic development, financial sustainability of the municipality.

“An example of financial sustainability would be that if the municipality provides tax relief to child-headed families or pensioners, this should not in any way compromise the municipality’s sustainability.”

Mogale City’s draft Rates Policy also rests on the principle of equity, which calls for treating ratepayers of similar properties equally. This means that a person living in a suburb or mansion should not pay the same rates as someone living in a two-roomed house in a low-cost township just because to the sizes of the stands are the same.