adminWalter Mswazie Masvingo Correspondent
CASH-STRAPPED Masvingo City Council is working towards reaching a debt swap deal with its debtors to enable it to settle tax arrears with the Zimbabwe Revenue Authority (Zimra).
The local authority owes Zimra over $5 million while it is owed about $30 million in unpaid water bills by residents, government departments and industry.
Town Clerk Adolf Gusha said debt swapping is not a new phenomenon as the local authority has previously entered into similar arrangements to offset its liabilities.
“We’ve done it with Zesa, the National Railways of Zimbabwe (NRZ) and even some government departments. Debt swapping will help us to remit tax to Zimra like Value Added Tax (VAT). Those who owe us will pay off our tax arrears to Zimra instead of paying the outstanding bills,” said Gusha.
The town clerk said what is needed is for the debtors to agree on an arrangement to pay council’s creditors on its behalf.
Gusha said the municipality has an obligation to remit tax to Zimra.
He said unless the local authority’s debtors pay up outstanding bills, service delivery would be affected.
According to latest council minutes, in February city fathers collected $287,256.50 in water bills against a target of $391,125.87 for the month.
“Handing over residents with outstanding bills to debt collectors is work in progress. We’ve instructed debt collectors to recover the debts but we agreed with them that they should agree on a payment plan with those affected,” said Gusha.
Some local authorities have resorted to disconnecting water supplies to defaulters, but residents have criticised the move as a violation of their rights.
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