Book Chapter - 'Fees as Alternative Sources of Local Revenue in South Africa’

The general statement that local government has extensive revenue-raising powers often hides the huge disparities in revenue generation among municipalities in South Africa and creates the perception that all municipalities are self-sufficient. The chapter looks at fees as an alternative source of revenue for local governments in South Africa.

The chapter explores three primary ways of financing municipalities. It then discusses the financing of municipal services, with a focus on the importance of fees. Comparators of rural municipalities versus urban municipalities are used throughout the chapter to show how varied these two types of municipalities perform when raising their own revenue, are allocated their share of nationally raised revenue (the local government equitable share) and in how they receive financing for territorial actions. The comparators show that poor, rural municipalities get the shorter end of the stick across the fiscal framework. A descriptive research approach was used for this chapter, coupled with an evaluative conclusion. The latter argues in support of a bigger focus being given to assisting municipalities to leverage their revenue-raising powers, specifically that of collecting fees, as opposed to dependence on the equitable share as an equalization mechanism.

The book ‘Municipal Tasks and Financing: An Urban-Rural Perspective’, Francisco Velasco Caballero, Martin Burgi, and Karl Kössler (eds), was published by Springer Cham.

This chapter can be accessed here. [Open Access]