Patrick Chitumba, Head of Midlands Office
DEFAULT Residents of Gweru will now pay five per cent interest to the council on overdue bills, while those who pay on time could soon get discounts.
Gweru City Council (GCC) is failing to meet its service delivery obligations as its coffers are depleted as debtors, which include residents and businesses who collectively owe it $1.6 billion.
In February alone, residents and businesses owed the council $1.4 billion.
As of December 31, 2021, the debt stood at $1.1 billion.
In an interview, Acting City Clerk Mr Vakayi Douglas Chikwekwe said a full council meeting on Monday evening passed a resolution to impose five per cent interest on defaulting ratepayers.
All 18 councilors in Gweru voted unanimously to impose the interest rate which aims to force taxpayers to pay their debts so that the town remains able to meet service delivery requirements.
Mr Chikwekwe said the local authority would penalize defaulters while rewarding paid ratepayers.
“A full council made up of councilors from 18 wards passed a resolution to introduce five per cent interest a year on all debtors.
Yes, that is the prescribed interest rate on overdue debts. It cushions the board a bit in this hyperinflationary environment.
The local authority would penalize defaulters while rewarding paid taxpayers,” Mr Chikwekwe said.
He said customer debt has skyrocketed as residents and businesses fail to pay service charges such as rates, rentals and water services.
“As we speak, customers owe the local authority $1.6 billion. The debt went from $1.4 billion to $1.6 billion in two months.
For this reason, it means that service delivery is hampered by non-availability of funds since residents and clients do not pay.
So if we add or factor in the five percent interest, that means when the customer finally pays, we will be amortized by the interest. This will improve our revenue collection,” Mr. Chikwekwe said.
He said only defaulting customers from three months will be affected by the 5% interest rate.
“Paying customers are unaffected and we are considering discounts to thank them for being loyal to the board,” Mr Chikwekwe said.
He said the council now owed $355 million to creditors, the bulk of it being Zesa, which owed more than $240 million.
“If we get the $1.6 billion from our customers, we’ll easily repay the $355 million to our creditors.
We are facing power cuts from Zesa as they force us to pay electricity bills time after time and it also affects water availability for customers especially residents. So we hope that the 5% interest rate will go a long way in depreciating council coffers,” Mr. Chikwekwe said.
GCC is also in the process of implementing strict debt collection measures such as demand letters, summonses, foreclosures, property execution titles and disconnections to force debtors to settle their debts. on time.
The House of Commons Public Accounts Portfolio Committee said last week that local authorities should be allowed to charge companies involved in the export or sale of goods in foreign currency, in foreign currency.
Committee chairman Brian Dube said it would help local authorities improve service delivery.
Ratepayers, especially in urban areas, have to deal with persistent water shortages, uncollected waste, pothole-infested roads and sanitation problems, as municipalities have to struggling to provide basic services, mainly due to the unavailability of foreign currency.
Fuel, spare parts and other consumables needed by communities to improve services are sold in foreign currencies, particularly US dollars, but local authorities charge rates and services in local currency.