Greater Johannesburg Transitional Metropolitan Council v Eskom

The Greater Johannesburg Transitional Metropolitan Council (the appellant), as successor to the Central Witwatersrand Regional Services Council, assessed Eskom for payment of regional establishment levies under s 12(1)(a)(ii) of the Regional Services Councils Act 109 of 1985 for the period 1 November 1987 to 30 November 1995. Eskom objected, relying on s 24 of the Eskom Act 40 of 1987, which exempted Eskom from paying levies payable to ‘the State’. The Income Tax Special Court upheld Eskom’s objection, finding that the levies were payable to ‘the State’. The appellant appealed to the Supreme Court of Appeal, contending that regional services councils and transitional metropolitan councils were not part of ‘the State’ for purposes of s 24 of the Eskom Act.

The appeal was dismissed, and the decision of the Income Tax Special Court was upheld. Eskom was exempt from paying the regional establishment levies for the relevant period.

The case is significant for clarifying the meaning of ‘the State’ in South African legislation and confirming that local and regional authorities are part of the State when performing governmental functions. It affirms a functional approach to identifying organs of state in pre‑constitutional and transitional contexts and has lasting importance for statutory interpretation, fiscal exemptions, and the legal status of local government bodies.