Rates hike recipe for revenue collection disaster

The City of Harare released a schedule of rates to be paid by ratepayers with effect from January 2020. These rates have shaken the beliefs of the ratepayers in their local authority. They are not shocked because the rates are out of this world. The rates are reasonable and justified if you view them using parallel or bank exchange rates against the United States Dollar currency.

However, the rates remain unaffordable and beyond the reach of the majority of ratepayers who are in self-employment and without a steady and consistent income. This Press Statement highlights the reasons why the residents will struggle to meet their financial obligations in terms of the latest budget released by the City of Harare.

The City of Harare has announced rates averaging $400 per month per household. The rates’ hike is just academic, ratepayers will not be able to pay them. The rates increases are mere figures thought up by highly remunerated bureaucrats and Councillors. The debt owed by ratepayers, industry and government departments will balloon with no hope of ever recovering it. Yet despite this knowledge of ballooning debt by council’s debtors, they still go on to make outrageous rates proposals which most ratepayers have failed to pay. Consequently, the little money that they will be generating will largely fund salaries, allowances and administration plus the ever present out of Harare workshops for Councillors. There is no relationship between increasing rates and improved services. The key request by ratepayers is that the City of Harare should be trustworthy with the little money flowing into their coffers. Without transparency and accountability, there is not going to be any improvement in the governance culture at Town House.

These rates increase will exacerbate the poverty levels of the residents as inequality amplifies. This is in violation of the Constitution of Zimbabwe’s ideals of equity, equality and egalitarianism. This affects the realisation of Sustainable Development Goals especially inclusive governance.

The City of Harare should try to be more realistic by using the interbank charges to estimate their rates. There is need for them to seriously consider the huge gap that they have created between the salaries and earnings of the majority workers whose salaries are not even pegged to the interbank exchange rate. They should try to promote co-production and co-creation of public services and goods. For example, the issue to do with refuse collection, citizens should not dump uncollected garbage at undesignated sites, thereby helping create a healthy and clean environment. This does not require a massive increase in rates. Policing council property to avoid vandalism does not require the council to increase or hike their rates or service fees.

Therefore the HRT argue that the City of Harare needs to engage more transparently and genuinely with residents, business and other key stakeholders than impose their own management-driven policy decisions. This is consistent with devolution which requires communities to manage their own affairs. Elected officials should not surrender their representative and oversight roles to the bureaucrats because at the end of the day they are the ones elected by the people during the last harmonised elections.

Source: Harare Residents Trust

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