Business organisation Sakeliga and local representatives today succeeded in obtaining an interim interdict against the Kgetlengrivier Local Municipality and a service provider. The interdict prohibits further steps in the unlawful collection of municipal rates, taxes and fees for sewage and refuse removal.
The interim order was obtained pending the finalisation of a main application to review and set aside the decision to allow the service provider of the Kgetlengrivier Local Municipality to collect payment of rates, taxes and fees in its own bank account, rather than that of the municipality.
Says Piet le Roux, CEO of Sakeliga: ‘With this initial court order great harm to local businesses and the community is prevented. I am delighted that Sakeliga could assist a local business community in this way, offering them a national support structure capable of quick and effective action. Municipalities with well-organised business communities are definitely going to do much better over the next few years in South Africa than those which do not.”
Sakeliga, together with local residents, brought a semi-urgent application for interim relief in the High Court in Mahikeng after it came under the attention of Sakeliga and community leaders that the Municipality had unlawfully contracted with a third party service provider to take control of the municipality’s collection of rates, taxes and other municipal fees. Of great concern to Sakeliga was the instruction of the municipal manager to residents to make payment of their municipal accounts into the bank accounts of the service provider which is in contravention of the Municipal Financial Management Act.
The municipality, under this alternative system of revenue collection, ignored the right of residents to dispute their municipal accounts and failed to provide proper invoices to residents. The alternative system furthermore severely prejudiced the community’s long-standing dispute with the municipality regarding property rates that were unlawfully levied during 2010 to 2014, notwithstanding a hard-fought legal battle won by the community ratepayers association in 2018.
The court today ordered the Municipality to immediately issue notices to the community stating that payment for municipal services, excluding prepaid electricity, should only be made into the Municipality’s bank account and not those of third-party service providers.
The court also ordered the Municipality to immediately suspend its instruction to third parties to collect fees on its behalf, except for payments for prepaid electricity.
Finally, the court also ordered the Municipality to only collect payment for municipal services, rates and taxes after providing its customers with an invoice.
The order does not prevent the collection of payment for electricity services via third party service providers. Says Armand Greyling, legal practitioner at Sakeliga: ‘While this concession regarding prepaid electricity is in accordance with Sakeliga’s plea to the court, the legality and fairness of the Municipality’s use of third party service providers is the subject of an ongoing investigation by Sakeliga’s legal team. We welcome information by members of the public with knowledge of similar unlawful contracts for the collection of municipal rates, taxes and electricity payments in any municipality in South Africa.’