Calling the write-off of municipal debts “an incentive scheme to instil the culture of payment, reduce the debt book and collect as much revenue as possible by offering interest write-offs and other incentives for prompt payment” does not change the essence of a proposed scheme, which comprises the writing off of interest and a percentage of debts by the Polokwane Municipality.
This scheme was tabled during the last municipal council meeting in December last year. The incentive will only be applicable if part of the debt was accrued prior to June 30, 2013.
According to municipal spokesperson, Tidimalo Chuene, municipal arrears currently amounts to R50 million for government and R500 million for residents and other arrears. According to the municipal system, on July 30, 2013, R30 million of this amount was for arrears by indigents.
The municipality now proposes to give all residential ratepayers and consumers with unpaid fee rates and service debts (arrears) a period to come forward and enter into a service agreement with the municipality.
The scheme, which is effective from December 1, 2013 to May 31, will see participants (those who owe the municipality arrears) offered several incentives to pay their arrears.
These include government departments’ interest being written off, and residents receiving a 30% write off of rates and services accumulated before June 30, 2010, with certain conditions applying. Residents participating in the scheme will also be receiving an additional 10% rebate on their average account quarterly for one year, for accounts paid up to date. Business and other institutions’ interest accumulated up to June 30 last year will be written off.
The full outstanding amount for qualifying indigents as at July 30 last year, will be written off. A list is to be published by the municipality for objections to be lodged.
The municipality prefers residents participating in the scheme to arrange for debit orders to pay their monthly accounts plus a portion of the arrears over a period, after paying a 50% of the arrears plus a deposit excluding interest. Should a debtor default on the agreement, further steps will be taken.
Polokwane Municipality decided at the council meeting to table the consumer payment incentive scheme to “relieve consumers of their arrears burden” so they could settle their accounts. In 2010 the municipality has also announced a scheme to entice consumers who did not pay their municipal accounts, to do so by writing off debts.
This seemingly did not have a huge impact, as the outstanding arrears for more than one year, at the end of October 2013, was R276 311 501.
Interest on the arrear debtor accounts (R474 360 389) at the end of October last year amounted to R18 007 840.
The municipality hopes to instil through the scheme a culture of payment and obtain new updated information about ratepayers and consumers, to update the billing database and to have debtors acknowledge and commit to pay their debt and acquire a deposit aligned to average consumption.
