Gweru City Council undertakes debtors cleansing exercise

THE cash-strapped Gweru City Council is currently undertaking a debtors cleansing exercise to verify the status of all debtors, as some of them include companies that ceased operations long ago but are still listed in the debtor’s accounts.

The exercise is part of the local authority’s strategy to manage and rectify its financial records, ensuring that they reflect accurate and up-to-date information.

In an interview yesterday, Gweru City Council’s assistant director of finance, Mr Owen Masimba said as of the end of May, the local authority is owed ZWG143 million with Government departments accounting for ZWG17 million of this debt.

Gweru City Council owes the Zimbabwe Electricity Transmission and Distribution Company (ZETDC), Zimbabwe Revenue Authority (Zimra) and the Local Authorities Pension Fund a total of ZWG26 million.

“Debtors cleansing exercise is an exercise we carry out to check the health status of all debtors to establish whether the council in its opinion will be able to collect monies owed by its debtors. This is guided by the law as enunciated in the Urban Councils Act,” said Mr Masimba.

He said ratepayers that have been in arrears for not less than five years may be written off if the council feels that such amounts are irrecoverable.

“The Act also says that provided that rates owed to the council by a company or an insolvent estate may be written off by the council at any time after the company has been wound up or the account of the trustee of the insolvent estate has been confirmed by the Master of the High Court in terms of Section 128 of the Insolvency Act (Chapter 6:04) as the case may be,” said Mr Masimba.

“We have companies that closed, or that went insolvent, but by nature, billing continues on all those fixed charges, these then bloat the debtors’ book whereas we will all agree that council will not be able to recover the amounts since the company either is now closed, insolvent or has the shield of the Master of High Court by operation of law.”

Mr Masimba said such debts would be removed from the system in line with Section 283 of the Urban Councils Act. He also mentioned that regarding workers’ salaries, the local authority is up to date, although payments spill into the first week of the succeeding month.

Meanwhile, Gweru Mayor Councillor Martin Chivhoko informed a recent full council meeting that Zimra garnished the council’s bank accounts over ZWG3 million in unpaid taxes.

“Zimra garnished our bank accounts last Tuesday over ZWG3 million arrears in respect of pay as you earn and value-added tax. “We have not been able to transact since the placement of the garnish order to date,” he said.

Clr Chivhoko said that as of last Friday, over ZWG2 million had been transferred to the Zimra bank account in compliance with the garnishing order.

“That is very unfortunate, but there is nothing that we can do but, comply with the garnish order. It’s rather worrying because, at the same time, creditors have been accumulating with the three major creditors ZETDC, Zimra and the Local Authorities Pension Fund owed a combined total of ZWG26 million as of May 31,” he said.

“The creditors have started taking action to recover the outstanding amounts. We thus encourage debtors to pay their bills.”