Poor municipal billing system and property ownership challenges have been identified as the biggest challenge that hinders Eastern Cape municipalities from collecting revenue.
This emerged during the last day of the Revenue Management Indaba hosted by the provincial CoGTA Department in East London in the Eastern Cape. Government departments have been flagged as the biggest culprits for not paying rates and taxes to the municipalities in the province.
Government departments’ debt to municipalities is totaling R2.2 billion as at the end of January this year. The Department of Public Works and Land Reform are the biggest contributors of this debt, followed by the Education and Health Departments.
The provincial Department of Cooperative Governance says to capacitate municipalities to be able to sustain themselves through revenue collection, there needs to be forged relationships between all stakeholders concerned.
“The challenges we face in municipalities is data management, there are some issues with credibility, in as far as government departments are concerned is the prioritization of payments and the identification of state lands has been a challenge in ownership between the three national departments. The solutions we are coming up with is capacitate municipalities in order to deal with data management credibility challenges and forging a relationship with SALGA, provincial treasury and COGTA,” says Babalwa Mbangeleli, Eastern Cape Cogta Deputy Director: Municipal Finance Development.
The major debtors to municipalities in the Eastern Cape, the Department of Public Works and Land Reform say property ownership and identification of land in rural areas is causing the non-payment.
“We’ve got a split of the debt where we have issues of ownership, and issues of vesting and recording in asset register. So, what we will be doing is engaging municipalities, so that we are able to clear historic debt so that we will be able to pay,” says Nwabisa Tyekela, Director Immovable Asset Management: Eastern Cape Public Works.
“It’s the issue of communal land where we don’t seem to find each other with municipalities in terms of if you are saying you are going to bill us on communal land, it’s not going to be easy to rate communal land, because there are multiple stakeholders that are at play. If you are talking communal land, you are talking a village, there are schools, hospitals, even community halls that are in municipalities. So, if you are going to bill us who are you going to single out as a person responsible for the debt.,” says Bahlekile Kelemani, Director: Property Management: Eastern Cape Dept of Agriculture and Land Reform.
The Department of Health in the province has committed in this Indaba that it will make a payment of R250 million to owed municipalities between April and May this year.
Video:E Cape’s COGTA Revenue Management Indaba to find solutions to distressed municipalities
Sidima Mfeku
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