BCC slashes shop, sports and social club rates

IN a move to ease the compliance burden for businesses, the Bulawayo City Council has reduced shop licence fees and sports and social club rates by 30 percent.

This decision was made in response to stakeholder outcry and the need to review tariffs last gazetted in 2020.

According to minutes from a recent special council meeting, BCC finance director, Mr Tennyson Mpunzi, the 2019 tariffs were gazetted a year later, after being overtaken by changes in economic conditions.

At the time of indexing tariffs to the US dollar in May 2022, the gazetted tariff for the smallest shop was equivalent to US$1,09.

An administration fee introduced in October 2021 increased the total fee for the lowest shop licence to US$238,11.

“Following an outcry on the level of tariffs charged from July 2022, it was proposed that the current USD tariffs be reviewed downwards using the gazetted 2019 tariffs (USD) as the baseline,” he said.

“An increase of 51 percent on the 2019 tariffs (that is, on the US$110,76) was expected to cover the increases in costs of providing the service since 2019 to date.

“This would reduce the lowest shop licence fee by 30 percent from US$238,11 to US$167,01,” said Mr Mpunzi.

He said the council had also considered the outcry from residents over the proposed cemetery and community facility fees for 2025.

The 2025 proposed budget had reverted to the gazetted tariffs, lowering the cost of burial.

“It was recommended that (i) Business Licences fees for 2025 be reduced by 30 percent, Sports and Social Clubs property rates be reduced by 30 percent while the rest of the other proposed tariffs and charges for 2025 remain unchanged as proposed in the 2025 budget,” said Mr Mpunzi.

He said in consultation with the private sector players, it was highlighted that a number of shops encountered constant raids from law enforcement agencies who demanded the production of various licences, including those issued by the council.

And due to concerns over the high cost of some council charges, some shops were resorting to playing cat and mouse with law enforcement agents.

“The stakeholders submitted one objection to the 2025 budget proposal but council resolved that the objection did not merit council revising its proposed budget,” said Mr Mpunzi.

“The stakeholders (led by CZI) objected to the tariffs insisting that tariffs should be reduced. Their argument centred on the rebasing of RTGS tariffs to US dollars done in June 2022.”

Mr Mpunzi said stakeholders, led by the Confederation of Zimbabwe Industries (CZI), objected to the tariffs, arguing for a reduction.

The stakeholders challenged the council’s tariffs, leading to the Ministry of Local Government and Public Works advising the council to engage further with stakeholders.

He said an initial special budget committee set up by the parent ministry in December last year failed to reach a consensus on the revised budget, resulting in the committee being reconstituted on January 24 and given seven days to have a consensus on tariffs.

“By end of day on January 29, 2025, the committee had not yet received a report from CZI or its recommendations. In a meeting held on January 30, CZI came with a proposal of three scenarios of increasing the 2017 baseline tariffs by either seven percent, 23 percent or 36 percent,” said Mr Mpunzi.

“However, they did not produce any documented justification for the three scenarios.”

The business community contends that the resolution to reduce the fees reached at a special council meeting on the 2025 budget and tariffs reduction held last week, was made without councillors being given full information on objections put forward by stakeholders.

An example is the 104 percent increase in labour costs for council staff from US$53 million in 2017 to US$108 as proposed in the 2025 budget by the council.

However, CZI Matabeleland Chapter vice president, Mr Clive Oxden-Willows, disputed Mr Mpunzi’s claims, stating that a paper with documentary evidence was presented, but councillors may not have seen it.

“What the finance director has presented to council is not true and it’s just unfortunate. A paper with irrefutable documentary evidence was presented but we now believe that councillors were not shown the document,” said Mr Oxden-Willows.