‘Councils should be able to charge rates in foreign currency’

Patrick Chitumba, Midlands Bureau Chief
THE Parliamentary Portfolio Committee on Public Accounts has said local authorities should be allowed to charge companies involved in exporting or selling products in foreign currency in forex.

Chairperson of the committee Mr Brian Dube said that would help local authorities improve service delivery.

Rate payers, especially in urban areas, have to cope with persistent water shortages, uncollected litter, pothole infested roads and sanitation problems as municipalities struggle to provide basic services mainly due to unavailability of foreign currency.

Fuel, spare parts and other consumables needed by local authorities to improve service delivery are sold in foreign currency especially the United States dollars yet local authorities are charging rates and services in local currency.

Harare City Council recently said it is approaching the Government to be allowed to start levying certain businesses rates in foreign currency.

Council believes this will improve revenue inflows and service delivery as it imports certain key materials needed for public works.

The Portfolio Committee on Public Accounts was conducting an enquiry into the compliance of Gweru City Council (GCC) with the 2018 Auditor General’s report on the state of service delivery of the city, which was said to be below standard.

The Auditor General’s report noted that the council was failing to collect refuse from residential areas, institutions and companies causing a surge in illegal dumping.

The report noted that the local authority had no refuse collection trucks and personnel to deal with refuse collection.

Council also did not have community based organisations assisting in refuse collection.

In an interview, Mr Dube said the exemption to charge foreign currency on corporates should be given to local authorities so that they have foreign currency to use in improving service delivery.

“Councils should be able to charge rates and services in foreign currency.

There should be a special arrangement relating to the corporates and the private sector where we are saying that those companies that we already know are charging in foreign currency, those in the business that gives them foreign currency should also pay councils in foreign currency.

For example, we have hotels that deal with tourists and are charging in foreign currency, we have companies involved in exporting, these should pay in foreign currency,” he said.

However, Mr Dube said ordinary residents should continue settling their rates and service charges in local currency.

“But this is not for ordinary residents.

We can’t be found saying the residents must pay anything in foreign currency because they can’t be found going to the black market and buying foreign currency.

It’s not sustainable.

We are looking at corporates like what even Zimbabwe Revenue Authority (Zimra) does or National Social Security

Authority (NSSA) at times to companies, they know this one gets foreign currency and charge them accordingly,” he said.

Mr Dube said it was unsustainable to local authorities for industry and corporates who charge and earn foreign currency to change the foreign currency into local currency to settle their council debts.

“We can’t have the industry polluting our environment and getting foreign currency which they then burn and come to council to settle rates and services in local currency.

After that they expect the council to go and pick their bins using fuel bought in foreign currency, which they struggle to get.

But Zimbabweans ordinarily should pay in local currency.

It is therefore prudent that local authorities get an exemption to start levying certain business rates in foreign currency so that they improve on service delivery,” he said.

Statutory Instrument 61 of 2020 says any person may pay for goods and services in Zimbabwe dollars or in foreign currency using his or her free funds at the ruling rate on the date of payment.

GCC director of health services Mr Sam Sekenhamo said council, since the publishing of the report, had purchased three more refuse collection trucks, 21 skip bins and a skip truck.

He said the council had engaged private players to collect litter in and around town.

“We now have five refuse collection trucks, but they are not enough.

We are working on procuring two more trucks for refuse collection and a skip truck to improve refuse collection,” said Mr Sekenhamo.

Director of Finance Mr Owen Masimba said service delivery was being hampered by the unavailability of funds since residents were not settling their debts.

“Residents expect service delivery, but they are not settling their rates and services bills which severely affects our operations.

We have fuel challenges because we charge in local currency, but service stations charge us for fuel and other consumables in foreign currency.

That affects refuse collection and the general service delivery to the city,” he said.