Municipality’s levy collection competency challenged

By Max Matavire Metro Editor

IN what could be a precedent-setting case, a Port Elizabeth businessman is challenging the constitutionality of the Nelson Mandela Bay municipality’s competency to collect regional services levies.

Speedo Nondumo has summonsed the municipality, Local Government and Housing MEC Sam Kwelita, Provincial and Local Government Minister Sidney Mufamadi,, and Finance Minister Trevor Manuel.

He is seeking an order declaring that certain sections of the Regional Services Council Act are inconsistent with the country’s Constitution and are therefore invalid, and that the municipality be interdicted from collecting regional services levies, and from taking any legal action against him for failure to pay such levies.

The matter dates back four years when the then Western District Council used to collect levies. This function was taken over by the Nelson Mandela Bay municipality after the formation of the metropolitan municipality.

The municipality is defending the case and has engaged the services of an advocate as the matter will be decided in the High Court in February next year.

A report tabled at a recent budget and treasury meeting says the implications of the case are that, if the municipality loses the matter, this will affect all municipalities in the country that collect regional services levies.

As a result of Nondumo’s challenge, a number of businesses have stopped paying their levies and are awaiting the outcome of the case.

“Our estimated value of these businesses’ outstanding levies is approximately R2,5-million.

“The municipality levies section is getting legal advice on how to deal with these businesses that are not shown as plaintiffs in the summons, but are withholding their payments.”

Nondumo, who is being represented by constitutional lawyer Rob Martindale, yesterday said he owed R40 000 in unpaid levies, adding that this could have doubled by now since it dates back four years.

He said he decided not to pay levies because he is of the opinion that the local authority, then the WDC, did not have the authority to collect levies. He said this was a competency of national government.

“I was paying levies before but when I became aware of my rights, I stopped. The WDC did not constitute a tier of government which collects levies. I am challenging this in terms of the Constitution,” said Nondumo.

“I am prepared to go to the Constitutional Court. I will fight this case.”

The municipality yesterday said it has obtained opinion from senior counsel which shows that it has “reasonable” prospects of success in this constitutional challenge, and has accordingly defended the matter, together with the State attorney on behalf of the other three defendants.

Regional services levies will be abolished after June next year, and will be replaced by a different form of tax which national treasury is still investigating.