Taxation by traditional leaders ruled unlawful

The Constitutional Court has blocked traditional leaders in the Limpopo Province from taxing their communities, saying the Constitution is clear that ‘unelected, non-legislative’ bodies cannot have this power. ‘The purpose of limiting the taxing power to legislative bodies is to ensure that there is 'no taxation without representation. Permitting unelected bodies to impose taxes would violate that basic principle,’ it ruled. Fin24 reports that the case was brought by 11 members of traditional communities falling under seven traditional authorities in Limpopo, along with a non-profit company. The Limpopo High Court (Polokwane) in November 2023, ruled that a section of the Limpopo Traditional Leadership and Institutions Act that allowed traditional leaders to impose levies or taxes was unconstitutional. For the order to become effective, it still needed to be confirmed by the Constitutional Court.

In a ruling published last month, the court found that the practice of traditional leaders imposing taxes or levies – rather than receiving voluntary tributes – was still ongoing in many communities. ‘The most common is the annual levy. The amount of the levy varies widely from about R20 to R150. Levies are imposed to raise money for a specific purpose, including in one instance for a new car for a chief,’ said the ruling penned by Justice Leona Theron, with all her colleagues concurring. Fin24 notes that the court found that, at times, traditional leaders imposed levies or taxes to allow communities to access a common resource that should be free. ‘These include levies to allocate a stand, allow the running of a business, or bury a family member. Levies are imposed for an act that should be free of charge, like providing a proof of address letter. Fines are often imposed for the non-payment of levies.’ The court found that while traditional and customary law has a ‘special place in the constitutional framework’, it does not extend to taxation. ‘None of these provisions [(in the Constitution) authorise traditional leaders to impose taxes. It bears repetition that the Constitution limits taxing powers to elected legislative bodies.’

Judgment

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