Supreme Court of appeal to rule on fair taxation for farmers

A date has been set for a landmark case at the Supreme Court of Appeal in Bloemfontein.
Litigation will take place between the Thaba Chweu Rural Forum, on behalf of its members, and the Thaba Chweu Local Municipality (TCLM).
A deadlock in negotiations with TCLM to adjust the rates on the farm property to legal specifications, aggravated by an abnormal hike in property valuations in 2014/15, started this costly six-year-long litigation process.
The combined effect of the increase in property valuations and the increase in the rates levied on farm property in 2014/15, resulted in an astronomical increase in agricultural and farm property rates.

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One example vividly illustrates the shocking consequences of this increase in taxes. The valuation of a game farm in the district increased from R9.3m to R46.6m. At the same time, there was more than a fourfold increase in the rates applied to this property.
The result was a rate increase from R948 per month in the 2013/14 financial year to R47 658 per month in the 2014/15 financial year. This was a fiftyfold increase in one year.
According to Eric Johnson, chairperson of the Rural Forum, their advocates will present a case on behalf of the members on November 15.

Contrary to false rumours, every court ruling to date has been in favour of the Rural Forum.
The most recent verdict in the Mbombela High Court of March 19, 2021, stated: “It is hereby declared that TCLM failed to comply with the statutory requirements and procedures relating to the adoptions of the resolutions and levying or raising of rates for the financial years from 2009/10 till 2018/19.”
Due to this ruling, TCLM could no longer prosecute members for unpaid rates accounts and had to adjust rural land owners’ accounts since 2019.

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Were it not for this verdict in the Mbombela High Court, members’ collective municipal rates bill of R18m would have amounted to R30m by June 2021. However, according to Rural Forum’s calculations, this collective bill should have been R10.4m, if rates had been correctly applied.
“It has been 14 frustrating years since we started negotiating with TCLM for legal and fair taxation, and we would love to get the six years of costly litigation behind us and get on with our lives,” said Johnson.
With his dedicated committee, Johnson has been labouring with considerable effort and expense on behalf of its 174 members, representing 100 000ha of rural land valued in 2014 by the TCLM at R911m.
Advocates Jan van der Westhuizen and Gert Bensch will present the Rural Forum’s well-prepared case to five Appeal Court judges, hoping to obtain an order compelling TCLM to adjust members’ excessive faulty rates accounts. The outcome of this case would not only affect local rural landowners but could become a benchmark case for all South African ratepayers.

The Rural Forum, after eight years of unsuccessful negotiation with municipal officials, received a mandate from its members to take the municipality to court. The sole purpose was to enforce legal and fair taxation.
Since the Mbombela High Court omitted to stipulate that the municipality had to rectify members’ accounts, back-dated to the implementation date of the Rates Act in July 2009, the Rural Forum had to approach the Supreme Court of Appeal.
“We cannot allow a government institution to blatantly disregard the law, to the detriment of ratepayers, and get away without restitution. We are doing this for the sake of justice,” said Johnson.
According to Themba Sibiya, TCLM’s spokesperson, the case is sub judice and TCLM is not permitted to comment before the ruling by the Supreme Court of Appeal.