Byo City Council misses income target

Byo City Council misses income target
Published: 07 January 2012 (776 Views)
The Bulawayo City Council missed its income target for the 10 months to October by more than $42 million as the closure of factories and loss of other sources of income affected revenue inflows.

According to a report by the city's director of finance Mr Kimpton Ndimande contained in the latest minutes, the council had up to 31 October raised $42 976 909 against a budgeted $85 793 404. The council budgeted to raise just under $103 million in the 12 months of 2011.

Mr Ndimande attributed the negative variance in revenue inflows to closure of shops and industries in the city, affecting budgeted income on licences.

Bulawayo has suffered from massive closure of companies as economic hardships take their toll. The city has lost its status as the country's industrial hub.

Government, concerned about the closure of companies resulting in job losses, late last year launched the $40 million Distressed Industries and Marginalised Areas Fund to assist companies from Matabeleland overcome working capital challenges.

The fund received an additional allocation of $30 million in the 2012 national budget.

However, companies are yet to benefit from the fund as modalities for disbursement are still being worked out.

Mr Ndimande said the council also lost significant income when Government gave the responsibility of vehicle licensing to the Zimbabwe National Road Administration which in turn contracted Zimpost to collect vehicle levies.

Mr Ndimande said the council suffered financially when Government reversed water levy, rates and  interest from 2009 which took effect in 2011.

"Budgeted income on water was based on anticipated higher consumption by residents and industries which has not been the case and also most water meters in residential and commercial properties are not working, consumption is based on estimates," he said.

He said because of non-working meters and general low level of industrial activity, council had not been able to benefit from water penalties.

Mr Ndimande said up to October, council had a cash deficit of about $5 million as expenditure of $48,4 million exceeded income.

However, expenditure for the 10 months to October had a positive variance of more than $37 million as council spent $48,4 million against the budgeted $85,7 million.

Meanwhile, council owes the Zimbabwe Revenue Authority and the National Social Security Authority a combined $2,075 million as it has not been remitting taxes and pensions to the statutory bodies.

According to a schedule in the council minutes, the local authority owed a total of $37,7 million to its creditors.

The bulk of the money is owed to Zesa which has more than $14 million due to it from unpaid electricity bills, and the Local

Authorities Pension Fund which is owed $13,2 million. At one time Zesa disconnected power to the local authority forcing council to use the more costly diesel-powered generators as the two parties failed to agree on a payment plan.

Mr Ndimande said the council owed Zimra $1,99 million in unremitted PAYE remittances.

The council has said it was failing to provide an efficient service because it was owed almost $60 million by ratepayers.

- TC

Tags: BCC, Council, Target, Income,
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