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Local Government: Municipal Finance Management Act, 2003 (Act No. 56 of 2003)


Municipal Supply Chain Management Regulations, 2005

Chapter 2: Framework for Supply Chain Management Policies

Part 4: Other Matters

51. Contracts providing for compensation based on turnover


If a service provider acts on behalf of a municipality or municipal entity to provide any service or act as a collector of fees, service charges or taxes and the compensation payable to the service provider is fixed as an agreed percentage of turnover for the service or the amount collected, the contract between the service provider and the municipality or municipal entity must stipulate—


(a) a cap on the compensation payable to the service provider; and


(b) that such compensation must be performance based.