Chantelle Benjamin

Johannesburg Metro Editor

THE provincial and local government department urged property owners yesterday to take on municipalities that bill them for land tax without complying with the provisions of the new Municipal Property Rates Act.

The legislation, which came into effect last month, compels municipalities to implement certain procedures before billing property owners.

These include valuation of the property concerned, development of a rating policy for the municipality, and conducting a rigorous consultative process with the community and property owners.

However, some municipalities have been billing property owners without implementing the required measurers and have even taken action against some.

An Mpumalanga farmer has been blacklisted for refusing to pay his municipality, and another received tax bills amounting to R65000.

Despite the act coming into effect this year, government does not expect it to be fully implemented for four years, with rural municipalities being the last to implement it.

"We are asking that farmers (who have been billed) to notify us so that we can investigate the relevant municipalities because if they are collecting taxes in terms of the act, it is illegal," said Shiva Makotoko, provincial and local government department chief director for intergovernmental fiscal relations.

The Transvaal Agricultural Union, which has approached Provincial and Local Government Minister Sydney Mufamadi with its concerns, said yesterday that the act was being used by "badly managed municipalities" as a "new source of income".

"Farmers are being asked to pay new rates without any agreement about services," said the union’s property rights manager, Chris Jordaan.

Makotoko said properties that had not been rated before, which would include many farms, would be introduced on a sliding scale to lessen the economic effect on farmers. "The new act is not just aimed at revenue collection but at ensuring that municipalities also offer the community certain services in return," she said.

Makotoko said the new legislation would first be implemented in the larger municipalities, which had better capacity, and assistance would be given to municipalities with less capacity.

Jordaan said: "Some municipalities immediately started taxing farmers after the act came into effect on July 2. We asked them where their budgets were, their rating system, their feasibility studies and their plan for development, but we received no answer."

Jordaan said the agricultural sector, which was already battling to survive, would be hard hit by the new taxes.

"We recently conducted an investigation and we estimate that in the next three to five years, the sector will lose a third of its 42000 farmers for economic reasons and as a result of issues surrounding the redistribution of land," he said.

Farmers are particularly bitter, as they believe that they are being called on to fund "inept" municipalities which at last count had debts of R40bn.