Court victory for Sakeliga in municipal rates collection case

Sakeliga recently won a victory for the taxpayers of Koster and Swartruggens against the local municipality's opaque and extortionate rates collection practices





Mar 23, 2024

Court victory for Sakeliga in municipal rates collection case

In a recent court victory, Sakeliga, a South African business organization, has successfully challenged illegal municipal collection practices, safeguarding residents and business owners from unfair financial burdens imposed by local governments.

The court ruling specifically targeted an arrangement in the Kgetlengrivier Local Municipality (Koster and Swartruggens), which would have allowed an external company, Ideal Prepaid (Pty) Ltd, to collect fees for municipal services, rates, and taxes on behalf of the municipality. This agreement would have permitted Ideal Prepaid to deposit these funds into a private account and deduct their costs and commissions directly, without proper oversight or transparency.

Sakeliga's legal action, supported by local business interests, aimed to halt these practices and ensure that municipal collections are conducted lawfully and transparently. The court order not only prohibits Ideal Prepaid from collecting local levies and taxes under the illegal agreement but also mandates that the municipality must issue proper tax invoices before collecting any fees for municipal services, rates, and taxes.

This legal victory underscores the importance of upholding principles that prevent unlawful municipal fee collections, benefiting not only the residents of Koster, Swartruggens, and the greater Kgetlengrivier area but also setting a precedent for other towns in South Africa. Sakeliga emphasizes the need for solutions to municipal challenges that incorporate private sector discipline while ensuring fairness and transparency in their implementation.

Despite initial success in obtaining an interim interdict in November 2019, Sakeliga's efforts were hindered by repeated unlawful actions and delays caused by the municipality. However, with this recent court order, residents and business owners can now move forward without the burden of illegal and unaffordable municipal collections.

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