ZETDC gets tax reprieve

Fidelis Munyoro Chief Court Reporter
Zimbabwe Electricity Transmission and Distribution Company got a reprieve after the High Court absolved it from paying unit tax to rural district councils in the country because the levy is outside the confines of the councils’ law.

However, the power distribution company will continue to pay way leave charges to the RDCs under the provisions of the Rural District Councils Act (Chapter 29:13).

The ruling comes after the ZETDC had sued all the 60 rural district councils for claiming payment of annual unit tax and way leave charges from the power distributor.

RDCs charge ZETDC way leave charges and unit tax for power lines that pass through the 60 districts and the substations established in the areas throughout the country.

In a recent judgment, Justice Mary Dube partially allowed the application by ZETDC.

“The levying by respondents (RDCs) on applicant (ZETDC) of unit tax is outside the provisions of the Rural District Councils Act . . . or any other law and is therefore unlawful,” said Justice Dube.

“The levying by respondents on applicant of way leave charges under Section 76 of the Rural District Councils Act . . . is intra vires the Act and is lawful.”

Since dollarisation of the economy in 2009, ZETDC has not been paying the tariffs. The bills collectively now run into millions of dollars considering that each of the councils was charging ZETDC unit tax and way leave charges in the range of $20 000 to $50 000 per year.

The councils had separately sued ZETDC and several default judgments had been granted throughout the country against the power utility.

This means the company’s property was under threat of attachment.

At the hearing of the suit, ZETDC argued that the charges levied against it were unsustainable and constituted a threat to its capacity to service the country. It was also argued that the charges were arbitrary and had no lawful foundation.

The councils opposed to the lawsuit arguing that the charges were above board and that they were doing everything in terms of the RDC Act.

By allowing ZETDC lines to pass through their areas of jurisdiction, the councils argued, they were equally offering a service to ZETDC and that the service should as well be paid for.

Advocate Thabani Mpofu instructed by Mr Vote Muza of Muza and Nyapadi law firm acted for ZETDC, while Mr Charles Warara of Warara and Associates and Advocate Julia Wood represented most of the councils.