NATIONAL TREASURY PROPOSED AMENDMENTS
MUNICIPAL FISCAL POWERS AND FUNCTIONS BILL [B 9-2007]
CLAUSE 1
1. On page 3, in line 14, after "means the" to insert
"municipality or the"
2. On page 3, in line 28, to omit paragraph (e)
3. On page 3, from line 31, to omit the definition of "municipal
service" and to substitute:
"municipal service" means -
(a) any of the local government matters listed in Part B of Schedule 4 and Part
B of Schedule 5 to the Constitution; and
(b) any function assigned to a municipality in accordance with section 9 or 10
of the Local Government: Municipal Systems Act, 2000 (Act No. 32 of 2000),
identified by the Minister by notice in the Gazette;
4. On page 3, in line 44, to omit "section" and to substitute
"sections 6, 8 or"
CLAUSE 3
5. On page 4, in line 19, after "(Act No.6 of 2004)" to insert
",and municipal base tariffs regulated under the Local Government:
Municipal Finance Management Act, 2003 (Act No. 56 of 2003), the Local
Government: Municipal Systems Act, 2000 (Act No. 32 of 2000), or sector
legislation"
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6. On page 4, after line 31 to insert:
(3) The Commission must within three months from the date of any consultation
referred to in subsection (2)(a)(ii) submit its views on the proposed municipal
tax in writing to the Minister.
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7. On page 5, from line 20, to omit paragraph (b) and to substitute:
(b) by not later than six months after that notification or such longer period
as may be necessitated in complying with section 10(4)(c), prescribe the
regulations contemplated in section 6.
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8. On page 6, from line 35, to omit "of' up to and including "5"
in line 36, and to substitute:
",where practicalities impede strict compliance with the norms and
standards prescribed in terms of section 8, of his or her own accord or on
application"
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9 On page 7, in line 27, after "Parliament" to insert "when in
session"
SCHEDULE
10. In the third column, opposite Act No 56 of 2003, to omit item 2 and to
substitute:
2. The substitution for subsection (6) of section 28 of the following
subsection:
"(6) Municipal tax and tariffs may not be increased during a financial
year [except when required in terms of a financial recovery plan].".
Brief description of the terms "rates, surcharges on fees for services,
taxes, levies and duties" used in section 229 of the Constitution of the
Republic of South Africa as understood by the National Treasury
(Requested by the Portfolio Committee on Provincial and Local Government on
22 May 2007 during a briefing of the Committee by the National Treasury on the
Municipal Powers and Functions Bill)
INTRODUCTION:
These words-most bear its ordinary meaning - a position confirmed by South
African jurisprudence.
BRIEF DISCRIPTION OF TERMS:
Rates on property:
Has the same meaning as tax and is regarded as a tax of a particular kind.
It is a tax on the value of the property normally expressed as a rate (cents
per rand or percentage). Tax base could be value of land and improvements or
only land. The new Municipal Property Rates Act prescribes that it must be
market value of both.
Fees:
Fees charged by the state can be distinguished from taxes insofar as they
are charged as payments for the supply of particular services. Fees are similar
to user charges.
Surcharges on fees for services:
A surcharge is used to describe an additional charge calculated by
reference to the basic fee (or tariff) due. Surcharges are typically introduced
as temporary or emergency funding measures in respect of specific government
spending requirements or in respect of a particular economic situation. It can
be viewed as a tax, as it is a payment in addition to the normal charge.
Taxes:
There is no single definition of a tax and definitions tend to vary
according to context. In general a tax may be defined as a government impost
which is not in turn for a specific benefit. It is a compulsory unrequited
payment to government. It is unrequited in the sense that benefits provided by
government to taxpayers are not normally in proportion to their tax payments.
The taxes are taken into general revenue and used for general purposes; the
taxpayer receives no specific service in return for his/her/its payment, but a
set of general services normally referred to as public goods, e.g. police,
defence and the like.
Taxes may be contrasted to fees or user charges in, that the latter payments,
while it might be compulsory, are generally requited, in the sense that there
is a link between the amount paid and the benefit provided:
Taxes may be classified in a number of ways, it can be classified by reference
to the base on which the tax is levied or by whether they are direct or
indirect or by whether they are levied on persons, commodities or activities,
the use to which the proceeds of a particular tax are applied or the method by
which it is levied or collected.
Levies:
Has the same meaning as tax. The meaning of the term is further defined by
its use and is not precise. Levies tend to be fixed or flat rate taxes imposed
on specific transactions, items or events.
Duties:
Has the same meaning as tax and is regarded as an indirect tax. Duties are
usually levied on imported goods.