Role of the Central Government in the Financing of Public Institutions
(b) as a direct charge against the Provincial Revenue Fund, when it is provided for in the Constitution or a provincial Act.
3. Revenue allocated through a province to local government in province, in terms of section 214(1), is a direct charge against that province’s Revenue Fund.
National Sources of Provincial and Local Government Funding 1. Local government and each province – (a) is entitled to an equitable share of revenue raised nationally to enable it to provide basic services and exercise the functions allocated to it; and
(b) may receive other allocations from national revenue, either conditionally or unconditionally.
2. Additional revenue raised by provinces or municipalities may not be deducted from their share of revenue raised nationally, or from other allocations made to them out of national government revenue. Equally, there is no obligation on the national government to compensate provinces or municipalities that do not raise revenue commensurate with their fiscal capacity and tax base.
3. A province’s equitable share of revenue raised nationally must be transferred to the province promptly and without deduction, except when the transfer has been stopped in terms of section 216.
4. A province must provide for itself any resources that it requires terms of a provision of its provincial constitution, that are additional to its requirements envisaged in the Constitution.
Provincial Taxes 1. A provincial Legislature may impose – (a) taxes, levies, or duties other than income tax, value-added tax, general sales tax, rates on property, or customs duties; and
(b) flat-rate surcharges on the tax bases of any tax, levy or duty that is imposed by national legislation, other than the tax bases of corporate income tax, value-added tax, rates on property, or customs duties.
2. The power of a provincial Legislature to impose taxes, levies, duties and surcharges – (a) may not be exercised in a way that materially and unreasonably prejudices national economic policies, economic activities across provincial boundaries or the national mobility of goods, services, capital or labour; and
(b) must be regulated in terms of an Act of Parliament, which may be enacted only after any recommendations of the Financial and Fiscal Commission have been considered.
Municipal Rates and Taxes 1. A municipality may impose rates on property, and excise taxes, and, subject to national legislation, may impose other taxes, levies or duties, but a municipality may not impose any income tax, value-added tax, general sales tax, surcharge or customs duty.
2. Any recommendations of the Financial and Fiscal Commission must be considered before- (a) the national legislation referred to in subsection (1) is enacted; or (b) a municipality imposes rates on property or an excise tax in terms of subsection (1).
Provincial and Municipal Loans A province or a municipality may raise loans for capital or current expenditure in accordance with reasonable conditions determined by national legislation, but loans for current expenditure – (a) may be raised only when necessary for bridging purposes during a fiscal year; and (b) must be repaid within twelve months.
2. National legislation referred to in subsection (1) may be enacted only after any recommendations of the Financial and Fiscal Commission have been considered.
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