08 October 2014

Cape Town's R1 billion rates write-off

Cape Town's R1 billion rates write-off

The City of Cape Town has passed up on income of more than R1 billion for the 2013/14 financial year by granting exemptions, reductions and rebates on municipal rates.

Mayoral committee member for finance Ian Neilson said this was income that could have been generated for the city.

'The purpose of these various forms of rebate are to ensure that rates are affordable to our residents, and that owning a home does not become prohibitive to those on low or fixed incomes.

'The income that we forgo must alleviate poverty, but it must also create opportunities. We urge all of our residents to make use of the opportunities which are unlocked as a result of the rebates. We need the people of Cape Town to work with us to make progress possible, together.'

The total rates income forgone, granted to ratepayers between July 1 last year and June 30 (which includes exemptions, reductions and rebates) amounted to more than R1bn, the city said.

However, provision is made in the budget for the forgone income.

According to the city's integrated development plan, which guides annual spending, the city's rebates policy is intended to provide a 'measure of poverty alleviation' for those who qualify.

More than 25 000 senior citizens and disabled people qualified for rates rebates of almost R66 million, while 1 219 non-profit organisations and sporting bodies had rates rebates amounting to more than R72m.

Almost 2 000 religious organisations were exempted from paying rates, which would have generated an income of R85m for the city.

The combined valuation reductions for residential and public service infrastructure was R769m.

Neilson said every residential ratepayer in Cape Town received some form of a rebate. A maximum reduction of up to R200 000 of the value of a property is granted to every individually valued residential property.

Lower-value properties receive a greater proportional rates rebate and benefit poorer people the most, he said.

The forgone income for residential value reductions up to R200 000 was R714m, for 680 584 beneficiaries.

Just more than 700 beneficiaries benefited from rebates of R60m for agricultural properties.

An income of R2m was forgone through the granting of rebates for 21 land reform beneficiaries, while just over 3 600 indigent ratepayers had rates rebates to the value of R3.9m.

The city launched an extensive information programme this year to encourage non- governmental organisations to apply for rebates on their rates, solid waste, water and sanitation before the August 31 deadline for the 2014/14 financial year.

The city's social development and early childhood development directorate has proposed changes to the city's rates rebate policy to allow registered early childhood development (ECD) centres to apply for rates rebates.

Suzette Little, pictured, mayoral committee member for social development, said: 'It is important that we do everything in our power to ensure that our ECD centres are able to fulfil this very crucial role in the lives of our children, in order to create a truly opportunity city. The money that they would be able to save courtesy of the rates rebates will go a long way towards enhancing the current level of education provided at the centres.'

Cape Argus

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