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MFMA Exemption for Municipalities Withdrawn

June 7, 2021

National Treasury

The exemption of municipalities and municipal entities from the provisions of the Local Government: Municipal Finance Management Act (MFMA) 56 of 2003 and regulations has been withdrawn.

National treasury published the exemption notice in Government Gazette 43181 in March 2020.

In a statement at the time, treasury indicated that the exemption is designed to ensure effective and efficient service delivery, minimise any potential delay in decision making and facilitate and enable legislative processes during the national state of disaster.

Municipalities and municipal entities were exempted from the timeline provisions in the MFMA until such time that the national state of disaster declaration is lifted by the president.

Once the national state of disaster lapses or is terminated, municipalities and municipal entities would have to take action within 30 days.

“It should facilitate the key process on the budget, timelines for adoption and reports, and related matters to be addressed in a manner taking cognisance of the challenges experienced as a result of the announcement of the disaster and lockdown.”

Municipal councils could also pass a special adjustment budget before the end of the 2019/2020 municipal financial year to authorise all expenditure linked to the emergency to address the COVID-19 pandemic.

Treasury published the withdrawal notice in Gazette 44654.

Meanwhile, the South African Revenue Service (SARS) has announced the withdrawal of the draft “List of Qualifying Physical Impairment or Disability Expenditure” published for comment in May 2021.

“In order to permit more time to engage with stakeholders, explain the intent behind the changes and understand the concerns raised, the decision has been taken to withdraw the draft Disability List.”

SARS added that a further draft Disability List may be published once the process has concluded.

The current Disability List, published in 2020 for the 2021 tax year onward, will remain in force until replaced.