Municipal Business Tax

**Dave A** · 08-Sep-11, 10:14 PM

I second Wynn

and Mother

If approved by the minister, the local tax on business will be the only tax instrument – besides property tax – municipalities have after the scrapping of regional service council levies in 2006.

Taxes on property, municipalities complain, are heavily constrained by the Co-operative Governance and Traditional Affairs Department’s insistence on ensuring consistency nationally.

As a motivation that sounds really good, particularly if you don't mention all the other revenue streams of the metros.

At least they concede one of their great failings... Collection!

The tax, which metros were proposing be collected by the SA Revenue Service, could either be a tax on...

**Blurock** · 10-Sep-11, 12:57 AM

With Government spending more and more, they had to think of new revenue streams. What did you expect? Who is paying for their lavish lifestyles?

**Dave A** · 14-Sep-11, 01:25 PM

A pretty interesting article here - Gordhan condemns rates boycotts.

This is pretty much on the money -

He said given the fiscal constraints faced by the government, political and administrative leaders had to do more to cut down on "improper" procurement practices and on fraud and corruption.

"There is no doubt much more could be done in this area than is being done," he said.

The Treasury "looked forward" to working with the auditor general and accountant general on putting "more stringent requirements in place" and getting better co-operation from officials and political leaders to ensure that taxpayers and ratepayers money was not "frittered away" without proper justification.

Municipalities, he said, had to do more to ensure they took decisions that ensured better quality spending,

"Municipalities need to focus on delivering services, on building their capacity, on building economic infrastructure, on investing the right amount in capital infrastructure and on both maintenance on infrastructure and the development of new infrastructure."

They also had to "forget the frills" such as buying a "brand new Mercedes or anything else like that".

But I found this bit rather out of touch with reality -

He said many of the issues ratepayers had with their municipalities could be resolved "the South African way".

"We sit around the table, we say what our challenges are and we find practical solutions to them. Creating tension and antagonism doesn't help."

Ja, right!

**BusFact** · 14-Sep-11, 02:27 PM

I'm with you on that. The comment about chatting to municipalities and resolving issues is pure fantasy. I challenge him to come along with me in an effort to chat to Joburg. After nearly a year, all I have is a still unresolved issue and an impressive collection of reference numbers from their call centre.

The municiplities have created the "tension and antagonism" themselves.

**Blurock** · 15-Sep-11, 07:30 AM

The "tension and antagonism" stems from incompetence. So much money taxpayers is wasted on unnecessary court cases due to the incompetence or lack of ownership by municipal officials. It's a disgrace.

**Pap_sak** · 20-Sep-11, 06:29 PM

I am sure Vavi will have lots to say if it went through - although I don't agree with everything he has to say, I think he is quite a level headed bloke and this would impact on jobs especially for marginal businesses. We are actually quite lucky in SA compared to the UK regarding business rents/rates and terms.

Generally in the UK:

Leases are generally for a minimum of 5-10 years.
You pay rent every 3-6months instead of monthly
There is no 8-10% a year increase, you have a rent review every few years or so and rent can quite easily go up 30-50%
Business rate there are way high than residential - and imo are a joke (do they actually want jobs?)
The lease holder has to maintain the whole building at the owners say so, not just the inside as in SA
You need a couple of lawyers just to sign a lease.

Give me the SA way any day of the week....

**Ann Williams** · 28-Sep-11, 01:29 PM

Government's latest little idea is to consider increasing business taxes in the 8 largest municipalities as a means of getting more towards the infrastructure spend that they are trying to raise....

**Dave A** · 28-Sep-11, 06:53 PM

I've been wondering...

What would business be prepared to do as protest action against something that they really objected to?

Unions would go on strike and stage a protest march (at the very least). But I can't see business resorting to a lockout - or a protest march.

Any ideas?

**AndyD** · 28-Sep-11, 07:54 PM

I suspect you've just answered any question on why a new tax would be aimed at businesses rather than personal income tax or VAT for example. Business, especially millions of small businesses have little lobbying power and even less liquid finances they could afford to throw at protesting so they're a soft target.

**deetee** · 20-Oct-11, 09:12 AM

A question no-one seems to be raising, is: what about all the "informal trading sector" businesses in these affected areas, the taxis, the fruit & veg vendors on the pavements etc. etc., all the purely cash based business ventures with no taxation of ANY sort, how will the new tax be implemented for this sector??

I am (or rather was) in the process of setting up business, doing the whole registration & VAT etc. thing. Well this process has now come to a very sudden halt. I will now shift my Banking to My Back Pocket Inc. (not a registered financial services provider!!), and work from home!!

I think it is wise for many of the smaller business owners to strongly consider reverting to the age old "mom & pops" format of business, keep it small and keep it yours, and KEEP IT UNREGISTERED!!

Complacency is the death of civilization!!