NATIONAL TREASURY PROPOSED AMENDMENTS
MUNICIPAL FISCAL POWERS AND FUNCTIONS BILL [B 9-2007]
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"
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"
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.
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.
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"
9 On page 7, in line 27, after "Parliament" to insert "when in session"
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)
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 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.
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.
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.
Has the same meaning as tax and is regarded as an indirect tax. Duties are usually levied on imported goods.