|dc.description.abstract||The advent of democracy in South Africa in 1994 brought new challenges in transformation including service delivery and economic development. In order to address these challenges, the new government adopted the approach of bringing government to the people through the decentralization of decision making and devolution of powers and functions. The vehicle through which this was to be done was the institution of wall to wall municipalities referred to as 'local government'. In other words, unlike in the past, all areas of South Africa including rural areas were incorporated into local government structures which were charged with the functions of service delivery and development. In order for these municipalities to carry out their mandates they were classified as 'developmental local governments' and not merely administrative units. They are also autonomous spheres of government.
It was clear from the onset that one of the major constraints faced by the newly created municipalities in achieving their developmental objectives is insufficient financial resources. In terms of the constitution of the country, the municipalities have access to equitable shares from the national coffers and conditional grants from both the national and provincial governments. These are however insufficient in the light of the inherited service delivery and developmental backlogs coupled with the high expectations and impatience of their people who had long been denied these services and developments. Consequently, local government had to find other sources of revenue. One of such sources was to charge service user fees. However considering the state of poverty and unemployment prevailing in most of these municipalities, the revenue base here is very limited. To broaden their tax bases therefore, it became necessary to implement property taxation systems. As a result, the Local Government: Municipal Property Rates Act, 2004 was promulgated.
However, the implementation of the new Act brought along its own problems for local government. Among these is either lack of or insufficient capacity in various areas of implementation. This study has identified such areas as human resource capacities, institutional and environmental capacities and capabilities. International experience has shown that property valuation and collection are the two key success factors within a Property tax administration system. It is also accepted that the administration of the various phases of property taxation rests almost entirely upon the skill and competence of municipal officials. Unfortunately most of the municipalities are incapacitated in these vital areas. To make matters worse, a lot of the municipal areas are operating in environments characterized by abject poverty and unemployment thus seriously narrowing the tax base. Another problem identified is the difficulty of identifying and assessing properties in traditional or tribal areas where communal ownership of property is dominant.
This study therefore has concluded that a lot of the municipalities are not yet sufficiently capacitated to implement the Property Act, 2004. In order for them to be able to implement it efficiently as demanded by the Act and the Constitution, they need to, among other things, design and implement appropriate training programmes for their officials, acquire the necessary technology, develop effective property management information systems, develop billing systems, pass relevant by-laws and muster the political will to assess and collect taxes on properties in their areas of jurisdiction.
The sampling type used in the study is the criterion purposive sampling. This means that only municipal officials directly involved in the administration of the Act (which was the criterion used) were selected for the sample used in the survey. A total of 117 officials made of all municipal managers, chief financial officers and the senior valuation officers of each municipality were surveyed through self-administered questionnaires. It is therefore noted that the findings are limited to the chosen sites and as such any transfer of findings to other areas require further research.||