Outa goes to war over Cape Town's drought tax

The organisation that led the fight against e-tolls in Gauteng has a new target - Cape Town’s proposed drought levy.

The Organisation Undoing Tax Abuse says mayor Patricia de Lille’s announcement of the levy on December 5 was flawed in four respects:

- It announced the decision to introduce the levy before the public participation process was conducted;

- Public participation between December 5 and January 12 coincides with the end-of-year-holiday;

- The levy is based on property value rather than water consumption‚ which Outa says is unreasonable; and

- The levy burdens residents with the consequences of maladministration — in this case the Department of Water and Sanitation’s failure to supply water‚ and the National Treasury’s failure to supply disaster funding.

In his letter to De Lille and city manager Achmat Ebrahim‚ Outa’s Julius Kleynhans demands a new public participation process between January 15 and February 15‚ the scrapping of the levy‚ action against the water department and a city council request to the Treasury for funding.

He says: “Outa is not against levies that will help the city recoup a percentage of its income lost due to the drought and the necessary water restrictions.

“However‚ we don’t believe that additional taxes on residents should be implemented. We also have little faith that those increased levies or taxes will be waived after the drought.”

In a statement‚ Kleynhans said the proposed levy was illegal because it was “based solely on a council decision and a statement issued by the city. There was no gazetted notice for comment on the introduction of the decision and no indication as to which laws allows the city to apply this levy”.

He added: “The levy is based on property values instead of water consumption‚ which means it is an additional punitive tax instead of a consumption charge. The city does not have the right to initiate its own taxes on top of existing property rates.”