Johannesburg to grant 50% debt relief to eligible taxpayers

Johannesburg City Mayor Geoff Makhubo said the city will offer large debt cancellations to eligible taxpayers as part of its debt rehabilitation program.

In his State of the City address on Tuesday, May 4, Makhubo said that minimizing the effects of the Covid-19 pandemic in cities has become an active feature of post-Covid urban management strategies.

“In response, the city – through the council – approved a debt rehabilitation program that includes additional relief measures for taxpayers amid the ongoing Covid-19 pandemic.

“The new program includes an increase in the value of eligible properties from R600,000 to R1.5 million following calls from residents asking the city to review the terms and conditions of the initial relief program, which was first launched in 2019.

“The enhanced relief program will allow eligible taxpayers to receive immediate relief through 50% debt forgiveness.

Talk to EWN, the city said the relief program would allow eligible taxpayers to receive immediate relief through a 50% debt write-off, after which the remaining 50% could be written off if certain conditions are met.

“If they continue to pay the city for current consumption, including tariffs and taxes over a three-year period without fail, then we amortize the remaining 50%,” he said.

Speaking on the current state of the city’s finances, Makhubo said that when he took office in December 2019, he inherited an institution that lacked experience and was riddled with governance failures in the areas of purchasing.

“In addition, the city’s internal systems almost collapsed, revenue collection was poor, financial mismanagement was high, irregular spending was record high, the city’s absence from all international platforms and government personnel. demoralized local amid a myriad of challenges.

Despite these issues and the difficult institutional and macroeconomic environment due to the pandemic, Makhubo said the city managed to collect 86.3% of revenue, against an adjusted Covid-19 risk target of 88% for the fiscal year 2019/20, as well as a surplus of Rand 3.7 billion for fiscal year 2019/20.

“It is encouraging to see that the city still collected more than 6% revenue,” he said. “In addition, the city’s financial position is strong, with total assets increasing by 5%.

Rate increase

Johannesburg Draft Integrated Development Plan (IDP) and Medium-Term Budget Framework published at the end of March proposes increases of around 14.59% for electricity and 6.8% for water.

Jolidee Matongo, a member of the City Mayor’s Committee for Johannesburg City Finances, said a large percentage of the city’s annual operational and capital expenditure is funded through the property tax levied on domestic properties and commercial.

There are also utility charges on electricity, water, sewer and garbage. The city also collects interest on fines, forfeitures and penalties. A marginal part comes from operating grants. To remain financially viable, tariff increases must be considered.

“The city is not oblivious to the current economic environment, made worse by the current pandemic,” he said.

“We would have preferred to table a zero increase in the tariff proposals, but if we go down this route, the city will put its own liquidity at risk. It is also important that we exercise financial prudence to meet the service delivery imperatives expected by taxpayers and residents.

Matongo said residents can always give their opinion on tariff proposals in the reports.

“The post-tabling public consultation process, as stipulated by the Municipal Systems Act, will allow residents and stakeholders to comment on the draft budget and the IDP within 30 days of reporting to Council. Stakeholders will be consulted through a variety of engagement methods.

“We are committed to continuing to improve the daily living experience for our residents and that is why we need residents to give us their opinion on the draft budget and the IDP. “

Lily: Electricity and water prices expected to rise in Johannesburg

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