By Nomfanelo Maziya | 2024-10-30

The Municipal Council of Mbabane (MCM) has approved a five per cent increase in property rates for the 2025/2026 financial year.

The five per cent increase will affect approximately 130 properties, resulting in an additional E1.89 million in revenue for the council. This is contained in the council’s annual operating plan for the 2024/25 financial year, which states that the MCM further recommended the adoption of the projected rates revenue of E159.2 million for the financial year. The rates for both land and improvements are set to increase slightly. Land rates will increase by 1.07 per cent while improvements increase by o.24 to 0.24 per cent during the period.

This decision was made after careful consideration of various factors, including inflation, the need to fund essential services and the impact on ratepayers. The five per cent increase aligns with the projected inflation rate for the budget period. This adjustment aims to ensure that the council can generate sufficient revenue to cover its operational costs and fund critical infrastructure projects. The council has also extended concessions to certain properties, particularly those located along or adjacent to specific locations. These properties will continue to be assessed at the general rate, which has been capped at 0.40 per cent for the current financial year.

“This adjustment will result in a five per cent increase in rates due from the affected properties,” it reads This measure is intended to facilitate a smooth transition to full commercial rates during the next general valuation roll cycle. Three different scenarios for rates were presented when the rate is adjusted by four per cent, five per cent and six per cent. The first scenario involved a four per cent increase in rates, which is below the projected inflation rate. While this approach would limit the impact on ratepayers, it would also result in a budget deficit of E2 million.

This deficit would hinder the council's ability to fund crucial infrastructure projects and services outlined in the Integrated Development Plan. The second scenario proposed a five per cent increase in rates, which aligns with the projected inflation rate. This option would generate a modest surplus of E0.1 million, allowing the council to maintain essential services and potentially fund some capital improvement programmes. The third scenario involved a six per cent increase in rates, which exceeds the projected inflation rate. This would generate a surplus of E2.5 million, providing ample funding for capital projects. However, such a significant increase could lead to discontent among ratepayers, especially considering the recent valuation roll.

Given the potential fiscal implications and public sentiment, the council, therefore, recommended the second scenario for the 2025/2026 financial year. This approach, according to the council, balanced the need for revenue generation with the impact on ratepayers. By aligning with the projected inflation rate, the council aims to maintain the purchasing power of its revenue while ensuring the delivery of essential services.

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