The Financial and Fiscal Commission has proposed new taxes for municipalities.
The new proposals are contained in a March report by the commission, an independent constitutional body that advises the Treasury on finances. It researched local government levies across the world.
Treasury supports the levies.
The auditor-general, however, says that many municipalities are wasting or abusing the public purse.
The commission highlighted property owners’ financial stress and warned that the extra taxes would not necessarily solve municipalities’ problems. It urged them to collect revenue already levied.
The new taxes are:
- A fire levy, which could be added to property rates or insurance contracts;
- An amusement tax, which could be added to entrance fees to amusement parks and casinos, among others;
- A development charge for property developers, payable on new and existing buildings;
- A tourism levy added to hotel bills;
- An advertising levy charged on the use of billboards; and
- A land value capture tax, payable by those whose property values rose through investment in public infrastructure such as an improved road.
Commission member, Daniel Plaatjies, told the Sunday Times the fire levy could buy fire engines, fire-fighting equipment and employ more firefighters. An amusement charge could be levied on amusement parks, casinos, jazz festivals and concerts.
The Commission supports development charges as developers must pay a fair contribution to the infrastructure required.
These levies would be ring-fenced for their specific purposes.
Plaatjies warned that additional taxes on residents during Covid-19 might not be practical.
The report says that many municipalities were unable to fully collect their revenue because of “poor administrative capacity to assess their revenue bases [and] enforce the payment of taxes, and poor records on taxpayers”.
These levies would be ring-fenced for their specific purposes. Rate payers may not be convinced of this.