REVIEW FOR RATING ACT, 1995

MBABANE – Hurdles associated with the collection of rates as well as challenges related to the sale of defaulting land properties should be a thing of the past.

This follows a decision to review the Rating Act, 1995. The Ministry of Housing and Urban Development is inviting proposals for consultant’s services to review the Act. The Rating Act, 1995 is the principal legislation governing the collection of property taxation in all urban areas in the Kingdom of Eswatini. With the coming into force of the national Constitution in 2005, it has emerged that certain provisions of the act now append the Constitution such that an urgent need for its review is imminent if it were to be continued with as a source document.

Provisions

Worthy of note is that there is outmost urgency to align these provisions of the act with the Constitution, among other national legislation, primarily because party income is the largest single source of revenue for local authorities without which may fail to sustain themselves at any given financial year. The first Rating Act that the country had to Govern Urban Local Authorities since independence in 1968 was the Rating Act, 1967. The 1967 legislation, among other issued exempted central government from property taxation yet on the other ground, a large space within municipalities and towns was occupied by government properties. In an attempt to grow local government entities in addition to making them self-reliant (semi-auto nous), a Rating Act review was undertaken in1995 to include government properties in the taxable paramounts.

Constitution

However, when the Constitution 2005 come into force, some provisions of the Rating Act were formal to be offending it. This became transparent when the Act was tested in the court and such pronouncement was made. Also local authorities have pin pointed some hurdles in the due process for collection of rates which may need to be addressed successfully in the review. This observation was also concentrated by a commission of enquiry that was appointed to look into the sale of defaulting landed properties in all urban areas. The ministry is inviting sealed tenders for provision of consultancy services. Consultancy firms are to submit proposals for the review. They are to be submitted in sealed technical and financial proposals. Tender documents can be obtained at the ministry (Director Urban Government Office) after payment of the amount of E300 non-refundable at the Eswatini Revenue Office. A compulsory pre-tender meeting will be held at Mbabane City Council conference room next Monday at 11am.

Assignments

Tenders must be delivered to the offices of the Eswatini Government Tender Board, Treasury Building, Mhlambanyatsi Road, Mbabane, Eswatini by or before 9am on January 21, 2022 and deposited in the Treasury Tender Box. The assignments have specific objectives to be fulfilled. They include a review the High Court judgements relating to disposal of landed properties done in the past five years on the implementation of the Rating Act in Mbabane and Manzini.  They will also be a review of previous submissions made on the initial attempt to the review of the Rating Act. The exercise will further involve the request for input on the proposed review from the Deputy Prime Minister’s Office, especially regarding indigent ratepayers within towns.

The output will be a draft Rating Act, highlighting the proposed changes to the legislation. This draft will be submitted to the attorney general’s office for further comments and/or inputs before submission to Cabinet for approval. The estimated total consultant time input for the assignment is 90 working days and the assignment is planned to commence next month.

Submission

The consultant will be expected to facilitate two workshops prior to the submission of a final draft of the proposed Rating Act review. The final workshop may take place after the 90 days due to the current adjusted lockdown situation currently taking place in the country. Lastly, local authorities in consultation with central government have agreed in principle that landed property tax is part of the national refine in the country; and as such a defaulting ratepayer should be penalised by the not issuing of a tax clearance certificate when sought.

This understanding will also have to be incorporated in the rates collection process through aligning it with the national tax clearance processes. The latest developments will come as a relief to ratepayers like prominent Mbabane businessman Walter Bennett, who has been vocal in the call for the review of the Act. In June in the past year, the former senator was quoted by this publication calling for the review of the Act to provide for much needed relief to groups such as retirees, orphaned and vulnerable children (OVCs), sickly and unemployed people.

Rates

Bennett suggested that the rates valuation exercise should relate to the capacity of the person to pay. He felt it was not logical to do the valuation assessment at a property of chief executive officer in the same fashion as a retiree or an unemployed person who earned the property through inheritance. “The Act must be reviewed so that there is a clause that speaks to giving people the chance to declare their income status prior to the valuation exercise. “If the Council recognises that places like Dalriach are not in the same geographical sphere like Sidwashini, the same concept should be applied with individuals and their financial capacity,” Bennett had said.

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