Chamber slams 'double' rates hike

The City of Cape Town's plans to increase commercial property rates by 15,8 percent - nearly double the increase in residential property rates - have been slammed by the Cape Town Regional Chamber of Commerce and Industry.

The chamber has fired off a letter of protest to the council in which it says the proposal is at odds with the city's Integrated Development Plan, which looks to business to grow the economy, create jobs and attract investment.

"This sharp increase... comes at a time of recession when many businesses are battling to survive and to retain staff," the chamber's executive director, Albert Schuitmaker, wrote.

"In these circumstances the proposed increase is more likely to result in the shedding of jobs rather than an increase in employment and the alleviation of poverty.

"We are concerned that the council sees the increased taxation of business as an 'easy option', for the owners of commercial property no longer have any form of franchise, (although) they contribute nearly half the city's rates income."

Schuitmaker said business, led by the chamber and the SA Property Owners' Association, had been largely responsible for the restoring of order to the central business district.

Businesses had agreed to pay a levy on top of their municipal rates to finance the Central City Improvement District.

"The result of the intensive management put in place by the (Cape Town) Partnership was a safe and clean CBD, a reversal of the business migration out of the CBD, massive new investment, a considerable increase in property values and, consequently, an enhanced rates income for the city."

Businesses throughout the city were paying high rates and then forking out again to secure the services that should have been provided from normal rates income.

"Commercial property owners are not getting fair value for their contribution to the city and have had to resort to CIDs.

"The extra levy on rates as the only way to secure an acceptable standard of management for the areas that provide the economic lifeblood of the city.

"We believe that business is already making a contribution in excess of its fair share, and any attempt to ask for more will be seen in an extremely negative light."

Schuitmaker said the chamber rejected the city's argument that the higher rates helped to fill the gap left by the scrapping of the Regional Services Council (RSC) levy.

"This gap is based on what the city estimates the RSC levy would have yielded if it were still in place. In fact, the collection costs have disappeared and the levy has been replaced by (funding from) the government - so business continues to pay the levy through the National Treasury.

"It would be wrong to ask business to contribute at national level and again at local.

"The RSC levy was a bad, regressive tax and any local replacement will be unacceptable." Through this levy, business contributed billions of rands to the city council.

"It is time to do some hard budgeting and not to look for more easy options from disenfranchised commercial property owners."

Article from: www.capetimes.co.za