n Journal of Public Administration - Collection of municipal own revenue in South Africa : challenges and prospects
|Article Title||Collection of municipal own revenue in South Africa : challenges and prospects|
|© Publisher:||South African Association of Public Administration and Management (SAAPAM)|
|Journal||Journal of Public Administration|
|Affiliations||1 University of Limpopo|
|Publication Date||Mar 2014|
|Pages||127 - 139|
Collection of own revenue in municipalities is a legislative requirement. The White Paper on Local Government (1998) emphatically states that municipalities need to have access to adequate sources of revenue in order to enable them to undertake the functional responsibilities assigned to them. In terms of the Municipal Finance Management Act, Act 56 of 2003, the municipal manager, as the accounting officer of the municipality, is mandated with the responsibility to manage the revenue of the municipality. In executing this function the accounting officer is among other things expected to take all reasonable steps to ensure that the municipality has an effective revenue collection system. Collection of own revenue is a critical determinant of the financial viability of municipalities. That is, the abilities of municipalities to collect revenue from own sources is, often times than not, highlighted as an important determinant of the financial viabilities of such municipalities. However, it is worth noting that despite this essential policy pronouncement, most municipalities, particularly those in predominantly rural settings, still struggle to generate their own revenue. This creates vertical imbalances between the functional responsibilities of these municipalities and the financial resources required to finance such responsibilities. It is primarily because of this consideration that service delivery backlogs continue unabated. The paper argues that the major financial problem confronting municipality in South Africa can be attributed to poor collection of own revenue, which undermine their financial viability. The paper concludes by arguing that unless and until there is a meaningful and adequate investment into the local economies of the municipalities that are predominantly rural, it would be difficult to enhance their financial viability through effective collection of own revenue.
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