Introduction
The levies/taxes at issue were imposed on indigenous communities for different reasons, including for reporting a death in a family, relocation to another village, and the allocation of a residential stand. The applicants argued that in cases where they failed to pay the levy, traditional authorities refused them essential services, such as the installation of toilets, access to grazing fields, assistance with the burial of loved ones, and issuance of proof of address letters.
In Mohlaba v Minister of Cooperative Governance and Traditional Affairs, the Constitutional Court confirmed the Limpopo High Court's order declaring section 25 of the Limpopo Traditional Leaders and Institutions Act 6 of 2005 (the Act) as constitutionally invalid.
Procedural history
Certain members of traditional communities and Nkuzi Development Trust (a non-profit organisation in Limpopo) (the applicants) brought before the Limpopo High Court a challenge against the constitutionality of section 25 of the Act. According to section 25(1), traditional councils, on the approval of the Provincial Premier, have the power to levy a traditional council rate to all taxpayers living under the concerned traditional community. Section 25(2) provides that the levy of traditional council rates shall be made known by the Premier through notice in the Government Gazette and shall enter into force from the date mentioned in such notice. In terms of section 25(3), the Act provides that a taxpayer who fails to pay the traditional council levy may be dealt with in accordance with the customary laws of the traditional community concerned.
The applicants in the case resided within traditional communities in Limpopo and had been subjected to paying levies under the provisions in the Act. They contended that the levies were compulsory and imposed without consultation with community members.
The question before the High Court was whether section 25 of the Act was consistent with sections 228 and 229 of the Constitution, which deal with provincial taxes and municipal fiscal powers and functions, respectively. The High Court found and declared that section 25 of the Act was inconsistent with the Constitution in that it impermissibly conferred power to traditional authorities to impose involuntary levies under Customary Law. It also held that the legislature is not constitutionally permitted to promulgate legislation that grants traditional authorities the power to impose involuntary levies. The court declared that Customary Law does not permit the imposition of involuntary levies on indigenous communities but makes provision for the imposition of voluntary levies after due consultation with the affected communities.
Before the Constitutional Court
In determining whether the High Court's ruling on the constitutional invalidity of Section 25 of the Act ought to be confirmed, the Constitutional Court considered three questions or factors, namely whether:
- only legislative bodies may impose taxes;
- traditional leaders have no power to impose taxes; and
- traditional levies and rates are taxes.
Only legislative bodies may impose taxes
In paragraphs 15 and 16 of its judgment, the Constitutional Court emphasised that due to the democratic centrality of the taxing power, the Constitution carefully regulates who can impose taxes, and how they must exercise that power (section 77 of the Constitution). The Constitution confers and confines taxation powers on Parliament, provincial legislatures and municipal councils. On this aspect, the court concluded that that the Constitution reserves the taxing power for legislative bodies and that, when it permits the imposition of tax, it does so expressly and regulates how the power must be exercised. Legislative bodies can delegate the power to regulate, but not the power to tax.
Traditional leaders have no power to impose taxes
On this enquiry dealing with whether traditional councils, together with the Premier, have the power to impose taxes as envisaged in section 25 of the Act, the court stated that it is plainly prohibited. The court further indicated that to the extent that section 25 delegates a taxing power to the Premier, it is inconsistent with the Constitution. In the same way that the Constitution does not allow the Executive to tax, the Constitution does not bestow such a power on traditional leaders and does not allow that power to be delegated to them.
Traditional levies and rates are taxes
Finally, on the issue dealing with whether traditional levies and rates are taxes for the purposes of sections 228 and 229 of the Constitution, the court held that the rates and levies envisaged in section 25 of the Act share all the characteristics of conventional taxes in that they are compulsory charges, uniformly imposed, paid into a general fund, for the public good or the provision of services. On the strength of these reasons, the court concluded that the High Court was correct to declare that section 25 of the Act is unconstitutional and invalid and the order of invalidity of that Court must be confirmed.
Importantly, the Court at paragraph 5 accepted that the imposition of compulsory levies on indigenous communities is inconsistent with the true customs/principles of Customary Law. Customary Law, as it stands, allows for the imposition of voluntary levies after due consultation with the relevant communities.
Conclusion
This case underscores the significant role which the courts play in the protection of vulnerable and marginalised communities who live under Customary Law in South Africa. The compulsory levies indigenous communities were required to pay may appear to be insignificant amounts, but for traditional communities who are often marginalised and economically downtrodden, they may well be significant. The consequences of not paying such levies, which include being deprived of necessities such as proof of address letters and access to burial sites for loved ones, can have far reaching consequences and may in fact be in violation of other constitutional provisions.
Reviewed by: Jan-Harm
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