Mnquma slashes debt by half

The Mnquma local municipality has approved a 50% discount debt rehabilitation programme to help residents who have unpaid municipal debt.
The Mnquma local municipality has approved a 50% discount debt rehabilitation programme to help residents who have unpaid municipal debt.
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The Mnquma local municipality has approved a 50% discount debt rehabilitation programme to help residents who have unpaid municipal debt.

On Monday the municipality called for ratepayers, including residents and businesses, to take “advantage” of the discount on all historical debt incurred before June 2019.

Mnquma mayor Sithembiso Ncethezo said the 50% discount applied on full settlement of existing debt. Local ratepayers owe the institution R160m, Ncethezo said.

He said settlement incentives would also be offered on current debt, upon negotiations with the authority.

In an interview with the Dispatch on Tuesday, Mnquma municipal manager Silumko Mahlasela said they had been struggling for a long time with non-payment of municipal bills  and hoped to stem their dwindling revenue collection with the introduction of the debt relief incentive scheme.

“The aim of the discount on municipal rates is to encourage ratepayers to come forward and settle their debts so that they can meet us halfway in fast-tracking the rollout of basic service delivery.”

He said Mnquma was standing “at no less than 15% revenue collection” from June 2020.

“This (debt discount) is the first of its kind and we expect it will yield positive results. The council took this resolution as part of its credit and debt management policy towards the end of last year, guided and advised by management.” 

He said the process would continue until the end of May 2021.

“The 50% discount will apply on full settlement of debt and it is an incentive that aims to encourage a culture of paying among ratepayers so that we have an improved municipality that is able to deliver decent services.

“Those who are not currently in a position to make full settlement are encouraged to come forward and enter into incentivised payment terms with the municipality.”

Mahlasela said the municipality would write off debt for indigent, pensioned and unemployed people after verification of their status.

The Mnquma Chamber of Commerce (MCOCAI) welcomed the initiative but called for transparency in handling the matter.

MCOCAI secretary Nosipho Mtuzula said: “One has to remember that we are talking about historical debts here. Legally speaking all debts that are three years and beyond outstanding fall under the category of prescription, meaning they are supposed to be written off as irrecoverable bad debts.

“Citing the other 50% that citizens have to pay, as this business chamber we can say it is too much. We must not forget that by now not all of these citizens are working, some lost jobs because of physical health, and age, others because of job scarcity, meaning not all can afford it. Yet they have rights to a municipal services benefit.”

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