MEP Marian Harkin and local TD Pádraig MacLochlainn were amongst those who addressed hundreds of people in Letterkenny.
The fee will be paid for annual inspections of septic tanks – with the Government trying to blame the EU for the charge.
Deputy MacLochlainn said: “Any suggestion that a registration charge be applied to the 30,000 homes in Donegal with septic tanks is completely unacceptable.
“For this Government to take advantage of an old EU directive as a means of raising additional revenue is unfair and unjust and a tax too far.”
He urged people throughout the county to lobby Fine Gael TDs Dinny McGinley and Joe McHugh to get the new tax stopped.