MEDIA RELEASE 20 December 2006 No need for concern over Property Rates Act The headlines of two recent articles on the Property Rates Act 6 of 2004 that appeared in the Roodepoort Record and the Citizen weekend edition are all smoke without fire, to say the least. Both indicate that Joburg ratepayers are allegedly in for a huge property rate hike in 2008 and according to the Roodepoort Record, this is as a result of Council having "passed a new property rates bill". Firstly, Bills are not passed at municipal level but only at a national level. Council only approved the implementation plan for a new rates policy and valuation roll effective as from 1 July 2008. To clarify that the Property Rates Act (PRA), it is in fact not a Council policy document but national legislation that requires all municipalities in South Africa to adopt it, the City held several interviews and issued media statements between September 2005 and April 2006. Mrs Gillian Redmond from the Caxtons in particular, had a lengthy discussion with both Councillor Parks Tau, Member of the Mayoral Committee for Finance and Economic Development and the Director for Rates and Taxes at that time. Both recent articles omit to mention an important component of some of the necessary processes that needs to be completed before implementation. This is public participation that the City is legally obliged to extensively consult with its residents prior to implementation of the new PRA. These omissions may be the result of an incorrect reading or a lack of understanding of the PRA. The date approved by Council is, as it stands, only the implementation date and not the policy itself. It is therefore unfair and incorrect at this stage for media to speculate on what it will cost ratepayers prior to the City having even determined a tax base and a tax rate. Barring exclusions, the PRA states that all properties must be evaluated. This will in effect result in a bigger tax base and a more equitable means of raising income for the City. The City will at the same time also consider appropriate interventions to address the possible shifts, amongst others: phasing in the tax increase where increases are high and, possibly, lowering of the rate in the rand so that residents do not experience large increases. Joburg will also consider providing additional exemptions with regards to pensioners, non-governmental organisations and other clearly identified bodies. Property rates and tariffs are reviewed annually during the City’s Budget and Integrated Development Plan. This involves an extensive public participation process because the administration believes it is important for residents to have a say in the affairs of the City. More importantly though, is that this is how municipalities generate income for sustained delivery of services, maintenance of infrastructure and undertaking of new developments. "The City derives its revenue from the following major sources: electricity, 24.8%: water, 20.7%: property rates, 20.7%: refuse removal, 3%: fines and licences, 1.4% and operating and capital grants, 20%" Ends Issued on behalf of Councillor Parks Tau Member of the Mayoral Committee for Finance and Economic Development Issued by Virgil James Communications Specialist Telephone: 011 407-7226 Cell: 082 467 9415 Facsimile: 011 403-3494 Email: virgilj@joburg.org.za