MFPFB-
7 COMMENTS ON THE MUNICIPAL FISCAL POWERS AND FUNCTIONAL BILL
CHIEF FINANCIAL OFFICER: CITY OF TSHWANE
I would like to give my comments as follows:
Section 5(2)
My concern is that it will take the Minister 6 month to notify the
municipality. municipalities or organized local
government and the Minister responsible for local government the intention to
authorize the municipal tax and by no later than 12 months after the
notification prescribe the regulations.
The implication of this is that it will take almost 18 months from the date of
application for the municipality to actually implement the municipal tax. The
time taken will have major impact in terms of service delivery and by the time
the regulation is gazetted, the tariff will have
already gone up or the CPIX changed in such a way that the new revision will be
required.
Furthermore. if the
regulation is gazetted mid of the financial year. the municipality will have to wait until the beginning of
the financial year.
Chapter 4 section 10 (2)
Regulations will only be reviewed every five years. This is very long; in fact
regulations should be reviewed every two years at least.
GENERAL
Heading of Section 229 is about Municipal Fiscal Powers and functions and one
may say this is all about Powers vested into the Municipalities. Section 229(2)
(b) stipulate that the powers of a municipality to impose rates on property
surcharges on fees for services provided by or on behalf of the municipality,
or other taxes, levies or duties may be regulated by national
legislation. As the constitution say may be regulated, my submission is
that this be left in the hands of the municipal council as the council is the
one which understands the needs of the community. I also believe that the
Council is also capable of making sure that when exercising their powers. they will do that in a way that will not materially and
unreasonably prejudice national economic policies, economic activities across
municipal boundaries, or the national mobility of goods, services, capital or labour. Municipalities are over regulated in such a way
that this undermines and hamper service delivery. At the end
of the day. when they is no services to the
community, it is the councilors and more specifically the executive mayor's who
are criticized and not the Ministers who make the regulations.
Through circulars. National Treasury gives guidelines
on how tariff need to be increased, and this also undermines service delivery. When there is no resources to provide basic service to the poorest
and if you approach NT regarding this. the
advice you are given is that municipalities should go and borrow. The question
that needs to be asked is who will pay for that debt. When the Minister of
Finance delivers his speech during February, he indicated that the way the
country was indebted, a decision has to be taken not to increase the debt but
to reduce it. Now the country is having surpluses. But immediately after that
speech, municipalities are encouraged to go and borrow as National government
has no money to give to municipalities to deliver basic services to the
poorest. Municipalities will borrow for basic services, 2010 and still be given
guidelines, regulations on how to increase tariff, impose surcharge and
introduce municipal tax. This really put Chief Financial Officer in trouble, as
the resources is required, and when you suggest for tariff increases which is
above the guidelines, no one understand why or if they do, but still it is
argued that tariff cannot be increased above the guideline. Even if you go and
borrow, tariff need to be increased so that they is enough for repayment of
interest and capital.
Conclusion
In order for the municipality to achieve its objects as stipulated in section
152 of the Constitution and in order to play its developmental duties as
stipulated in section 153 of the Constitution, the National and Provincial
government should not compromise or impede a municipality's ability or right to
exercise its powers or perform its functions.
Hope the comments will assist in the finalization of the bill
N. Makhari
Chief Financial Officer: City of Tshwane