Small businesses in eThekwini are expected to benefit from lower anticipated municipal tariff increases after the municipality adopted its 2026/27 Medium-Term Revenue and Expenditure Framework (MTREF), valued at R75.3 billion.
The budget, approved last week, is aimed at accelerating service delivery, renewing infrastructure and implementing turnaround strategies for the City’s trading services. As part of the final budget, several proposed tariff increases were reduced following public consultation and engagement with residents, businesses and ratepayer groups.
Business water tariffs will now increase by 13%, down from the initially proposed 16%. Business sanitation tariffs were reduced from 14% to 9%, while the average property rates increase was lowered from 5% to 2%. Electricity tariff increases were also revised downward from 10.5% to 9%.
The reductions have been welcomed by business stakeholders who argued that the original proposals would have placed additional pressure on companies already struggling with rising operating costs.
Small enterprises, particularly those operating in the hospitality, food production, manufacturing, laundry and car wash sectors, stand to benefit from the revised tariffs. These businesses rely heavily on water and municipal services in their daily operations.
Lower increases mean businesses will spend less than expected on essential services, allowing them to preserve cash flow and avoid passing additional costs onto consumers.
Property rate cuts may support business stability
The reduction in property rates may also provide relief for businesses renting commercial premises. Property owners facing lower municipal increases may be under less pressure to raise rentals, helping SME tenants manage their occupancy costs.
Chairperson of the eThekwini Ratepayers and Residents Association (ERRA), Ish Prahlad, welcomed the revised tariffs but said concerns remain about the water increase.
“The announcement of the new tariff rates was commendable, but I am not very happy with the water rate. Mayor [Cyril] Xaba was exceptional in helping to bring down the rates, and if he could, he would bring down the rates even more,” said Prahlad.
eThekwini Mayor Cyril Xaba said the revised tariffs were intended to provide relief to both residents and businesses while ensuring the municipality remains financially sustainable.
“As a caring City, we certainly hope that this brings some relief to our ratepayers and consumers,” said Xaba.
Economists note that while municipal charges are still increasing, the reductions could improve business confidence by limiting additional financial pressures. Money saved on municipal costs can instead be directed towards business expansion, stock purchases, equipment upgrades or employment opportunities.
However, business owners caution that the revised increases remain significant and come at a time when enterprises continue to face rising fuel, insurance, labour and electricity costs.
As the new financial year begins, SMEs will be watching closely to determine whether the revised tariffs provide enough relief to support growth.
