National Treasury has defended withholding R13.5 billion in equitable share transfers from 69 municipalities as a last resort to enforce fiscal discipline.
Director General Dr Duncan Pieterse told the Portfolio Committee on Cooperative Governance that the move followed failed oversight efforts. Consultations occurred with affected municipalities last December after notices were issued in September and December 2025. The initial list covered 99 municipalities but dropped to 69 after some met revenue requirements.
Pieterse described the action as corrective rather than punitive. He noted that section 216 of the Constitution and the Municipal Finance Management Act allow temporary funding cuts until compliance is proven.
Finance Minister Enoch Godongwana stated National Treasury can withhold transfers for up to 120 days unless Parliament intervenes. The briefing informed Parliament of the intentions and conditions for proceeding.
