Part 1: Service tariffs

74. Tariff policy

  1. A municipal council must adopt and implement a tariff policy on the levying of fees for municipal services provided by the municipality itself or by way of service delivery agreements, and which complies with the provisions of this Act and with any other applicable legislation.
  2. A tariff policy must reflect at [east the following principles, namely that-
    1. users of municipal services should be treated equitably in the application of tariffs;
    2. the amount individual users pay for services should generally be in proportion to their use of that service;
    3. poor households must have access to at least basic services through-
      1. tariffs that cover only operating and maintenance costs;
      2. special tariffs or life line tariffs for low levels of use or consumption of services or for basic levels of service; or
      3. any other direct or indirect method of subsidisation of tariffs for poor households;
    4. tariffs must reflect the costs reasonably associated with rendering the service, including capital, operating, maintenance, administration and replacement costs, and interest charges;
    5. tariffs must be set at levels that facilitate the financial sustainability of the service, taking into account subsidisation from sources other than the service concerned;
    6. provision may be made in appropriate circumstances for a surcharge on the tariff for a service;
    7. provision may be made for the promotion of local economic development through special tariffs for categories of commercial and industrial users;
    8. the economical, efficient and effective use of resources, the recycling of waste, and other appropriate environmental objectives must be encouraged;
    9. the extent of subsidisation of tariffs for poor households and other categories of users should be fully disclosed.
  3. A tariff policy may differentiate between different categories of users, debtors, service providers, services, service standards, geographical areas and other matters as long as the differentiation does not amount to unfair discrimination.

75. By-laws to give effect to policy

  1. A municipal council must adopt by-laws to give effect to the implementation and enforcement of its tariff policy.
  2. By-laws in terms of subsection (1) may differentiate between different categories of users, debtors, service providers, services, service standards and geographical areas as long as such differentiation does not amount to unfair discrimination.