via Ailing Byo firms seek more relief from council – NewsDay Zimbabwe August 21, 2015
STRUGGLING Bulawayo companies have approached the city council seeking more relief despite the local authority offering a 50% discount on rates owed.
BY MTHANDAZO NYONI
Last year, Bulawayo City Council (BCC) extended the grace period for companies to settle their outstanding levies by three months to September, after the previous deferment provided $1,2 million relief to local firms.
However, a latest report by the council’s finance and development committee revealed that council was continuing to receive enquiries regarding further extension of the incentive’s from companies.
“The department continued to receive enquiries regarding further extension of the incentive,” reads part of the report.
“This time the ratepayers were requesting that the discount period should shift from 31 December 2013 to 31 December 2014. The basis for the requested shift was that the discount on the balances as at 31 December 2013 was no longer attractive,” the report reads.
The report showed that the outstanding amount as at December 31, 2014 was $42 million and the basis for the requested shift was that the discount on the balances as at December 31, 2013 was no longer attractive.
However, the council was cautious about the request made by the businesses.
“Whilst the extension of the 50% discount incentive was plausible, it would appear that some industrial and commercial account holders were now postponing payment of their bills until just before the expiry of the promotion,” reads part of the report.
“The proffered reasons were that businesses were struggling to survive in this harsh economic environment. It would appear that the incentive was now taken as a moratorium, which had had a negative effect on the daily cash inflows,” the report added.
According to the report, the council’s finance director Kimpton Ndimande recommended that the request to extend 50% rebate be not acceded to because the ratepayers were abusing the scheme.
Other committee members felt that if the incentives were scrapped, council cash flows would further dwindle as for the period January 2015 to June 2015 cash flows had fallen short of the expected target of $7 million per month.
They then recommended that the 50% incentive scheme be extended to December 31 2014 balances “on condition that ratepayers in the scheme do not exceed two months in arrears on current rates, excess of two months in arrears automatically cancels the arrangement”.
In January last year, council announced a cocktail of incentives, among them a once-off 50% discount on amounts owed if the arrears were settled before June 30, 2014 in a bid to ease the burden on Bulawayo’s struggling industries. It also relaxed its intensive water-rationing schedule and waived penalties and interest rates on accounts owing.