POLITICS

National law now prevents Cape Town from supporting some NPOs – Ian Neilson

Amendment to national legislation outside city's control, efforts being taken to minimise negative effects

National law now prevents City from giving rates rebates to some NPOs, PBOs 

26 March 2019

Due to changes in national legislation certain Non-profit Organisations (NPOs) and public benefit organisations (PBOs) who in the past could qualify for rates rebates will no longer be able to access this assistance. However, the City of Cape Town is looking at ways to assist these organisations as a matter of urgency. Read more below:

The manner in which rates rebates for PBOs and NPOs were historically assessed and granted will no longer be permissible from 1 July 2019. This is due to changes in national legislation, which affect the way in which all municipalities are able to levy property rates.

The City is therefore investigating alternative options to support these organisations.

The amendments to the Local Government: Municipal Property Rates Act (MPRA) have necessitated a major revision of the City’s Rates Policy for the 2019/2020 financial year.

As from 1 July 2019 the City can no longer grant any rates rebates to PBOs or NPOs. However, in accordance with phased-in changes to the MPRA, the 2019/2020 Rates Policy now includes a new property category called ‘Properties owned by public benefit organisations and used for specified public benefit activities’.

By law this category is limited to PBOs listed in Part 1 of the Ninth Schedule to the Income Tax Act in respect of activities listed in item 1 (welfare and humanitarian), item 2 (health care) and item 4 (education and development). Properties in this category will be rated at 25% (one quarter) of the residential rate-in-the-Rand.

‘All PBOs and NPOs that currently receive a rates rebate are encouraged to apply for a grant-in-aid using the mechanisms set out in the Grant-in-Aid Policy. We have been sending correspondence on this to those organisations affected. We recognise the significant value of many of these organisations in our communities and neighbourhoods. As a caring city we are doing everything in our power to help as many of these organisations as possible.

‘This amendment to the national legislation is outside of our control and we are looking at ways to minimise any negative effects as a result of this. We will consider further amendments to our Grant-in-Aid Policy to assist such organisations further,’ said the City’s Executive Deputy Mayor, Alderman Ian Neilson.

The current Grant-in-Aid Policy is available here:

The draft Grant-in-Aid Policy applicable for the 2019/20 financial year will be made available with the City’s Budget that is published for comment.

Please note that any grant in terms of the Grant-in-Aid Policy will not be in lieu of any rates, but will have to meet the requirements of that policy.

The City is busy alerting all PBOs and NPOs that applied for rebates in the 2018/19 financial year to this change.

Issued by Ian Neilson, Executive Deputy Mayor, City of Cape Town, 26 March 2019