North West municipalities owed billions for rates and taxes

Municipalities across the North West find themselves under serious financial strain due to non-payment of rates for services provided to residents, businesses, and government departments.

The Rustenburg Local Municipality is severely affected. They are owed an estimated R5 billion for rates, making it nearly impossible to render services.

Most municipalities in the North West are facing violent community protests, as communities demand better service delivery.

Currently, 13 of the province’s municipalities have been placed under administration. The collapse of governance and financial mismanagement have been cited as some of the reasons for the provincial government to take over these municipalities.

However, one of the hidden factors, according to the provincial department for local government, is the failure to pay rates and taxes by communities, businesses as well as government departments.

“A huge amount is owned by households, just ordinary households. Second to that, the government also does not pay the municipality in time. We are sitting with a problem. Right now, if I have to make an example, in Kgetlengrivier Local Municipality where for the past two years they have not been paying the rates and taxes and that is actually crippling the municipality,” MEC for Local Government in the North West Gordon Kegakilwe.

North West Health MEC Madoda Sambatha saying municipalities are not doing well in terms of environmental health: 

Rustenburg Local Municipality is one of the biggest in the country. 95% of income for the municipality is gained through rates and taxes.

However, now the municipality is faced with a mammoth task of rates collection.

Municipality spokesperson David Magae says the municipality is owed R5 billion. “One you’ve got an increase of people who no longer enjoy formal employment due to the retrenchments in the mining sector, as well as people who are behind or are in arrears with the municipal account. This affects our ability as an institution.”

The Municipal watchdog in Rustenburg, MUNSOLVE, says the municipality’s financial position keeps on deteriorating due to management’s failure to implement the correct credit control measures.

“This municipality has not done its constitutional duty to collect from everybody. So they have implemented unfair selective credit control.  I think that is one of the biggest problems and they have not implemented the policy, which they have promulgated, “ says Co-founder for MUNSOLVE Frans Roothman.

Rustenburg Local Municipality says it was forced to implement an aggressive revenue collection campaign since late last year with the hope of getting some money into their coffers.