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An approach for developing an optimal rates policy : a case study of KwaDukuza municipality.

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Levying a rate on property is incumbent upon Municipalities who have a Constitutional responsibility for providing services to and creating opportunities within their communities. There is a statutory obligation upon a municipality to develop and annually review a rates policy, which will inform its annual budget. Not all municipalities have the human resources to develop such budgets and policies and rely on consultants to assist. The study was based on a rates modelling tool that could assist where these resources were limited, as private consultants would not have to be appointed to assist in the drafting of a municipality’s budget and policies. Three research objectives were developed to guide the study in identifying the most appropriated category of properties to be included in a valuation roll, to develop appropriate criteria for rebates and exemptions, based on categories of owners and determining the most appropriate rate randage to be applied to the various categories of property in the calculation of rates. The study was located in KwaDukuza Municipality with the rates policies of eThekwini, Umdoni and Ray Nkonyeni Municipalities being applied to KwaDukuza Municipalities valuation roll. A descriptive quantitative approach was utilised in this study. The model results for each policy were analysed and compared in order to reach a conclusion. It became apparent that a “one size fits all” approach to a rates policy cannot be used as each municipality has differing demographics, economies and industry which influences the approach to take with a rates policy. However, there are certain categories of property that can enhance revenue without negatively impacting on the affordability and commerce within a municipal region. There is a balance required between optimal income to encourage development within a region and the relief that should be made available to vulnerable members of the community.


Master’s degree. University of KwaZulu-Natal, Durban.