Government departments owe millions to Matatiele Local Municipality
Unpaid rates and taxes are affecting its ability to deliver services, says the municipality
Various government departments owe Matatiele Local Municipality a combined debt of R94-million in unpaid rates and taxes. Photo: Nombulelo Damba-Hendrik
- Matatiele Local Municipality says it’s owed about R95-million by six government departments with Eastern Cape Public Works being the worst offender.
- Municipality spokesperson Luncedo Walaza said the debt is for unpaid rates and taxes and it has affected the municipality’s ability to deliver services.
- The government departments we spoke to mostly disputed the amounts and several blamed shoddy billing and slack invoicing by the municipality.
- However the undisputed amounts however still add up to many millions.
The Matatiele Local Municipality in Eastern Cape has turned to the Department of Cooperative Governance and Traditional Affairs (COGTA) to help recover rates and taxes owed on buildings belonging to government departments.
Matatiele Local Municipality spokesperson Luncedo Walaza said the municipality is owed about R95-million by various departments.
This is a municipality with total property rates revenue of R49-million and service charges of R68-million in the 2021/22 year.
Walaza said the debt is for unpaid rates and taxes and it is affecting the municipality’s ability to deliver services to residents.
A council meeting on 28 March heard that the provincial department of public works owed over R83-million and the national department R3.8-million. Other departments reported in arrears are the provincial departments of health, owing R7-million; rural development and land reform, owing R1-million; education, owing R75,000; and social development, owing R27,000, according to a report read in council by Mayor Sonwabile Mngenela.
Walaza said COGTA is assisting the municipality in collecting the outstanding amounts.
According to opposition parties, the problem of uncollected rates and taxes from government departments has dragged on for years.
Economic Freedom Fighters (EFF) Alfred Nzo regional secretary Siseko Sikhafungana said, “We are not surprised … as we all know the municipality and these departments are run by same government.”
“When hawkers fail to pay their permits, you will see Law Enforcement taking their things, but when it’s a government department, which has the budget to pay the rates, the municipality negotiates,” he said.
He said excuses had been made but “we feel that the municipality is very soft with these departments”.
Democratic Alliance ward councillor Wonga Potwana said the problem was “very old”. “At each and every financial report meeting we question this. As opposition parties, unfortunately, we are few, and the majority is keeping quiet about the matter,” he said.
However, asked for comment, departments disputed the amounts owed and several blamed shoddy billing and slack invoicing by the municipality for the debt.
Provincial Department of Public Works and Infrastructure spokesperson Siphokazi Msiwa presented a schedule of amounts the Matatiele Local Municipality said the department owed, adding up to just over R80-million. This included R25.7-million in interest the department wants written off; R10-million it says is not payable or not owed; and millions more marked “awaiting documentation” or “payable upon confirmation”.
Msiwa said quarterly arrear debt meetings are held by COGTA to address the debt owed to municipalities by government departments.
Msiwa said on 9 March a resolution was taken that the municipality needs to correct its rates register and bill the correct departments.
Provincial health department spokesperson Yonela Dekeda said the department owed R4.7-million as of 30 June, not R7-million. Dekeda said the outstanding balance is due to historic debt associated with lump sum settlements of medico-legal claims that had impacted the current year’s budget.
“The department is having ongoing engagements with the municipality and further payments will be made in due course, in line with the available cash flows,” she said.
Department of Agriculture, Land Reform and Rural Development spokesperson Reggie Ngcobo said the R1.3-million it is said to owe could not be confirmed because “invoices to prove such are not forthcoming” from the municipality.
He said department representatives would meet in person with officials on 24 July “to assist with reconciliation” of the account and amount owed. He said they also need to verify if properties they are being invoiced even belong to the department.
The National Department of Public Works and Infrastructure spokesperson Thami Mchunu denied the department owed the municipality and said its account is up to date.
Mchunu blamed the municipality for “irregularly accumulating interest” which it now wants cleared. He said at a COGTA meeting in June the municipality said it would put a resolution to council to clear the interest which stood at R3.88-million on 30 June 2023.
Provincial education department spokesperson Malibongwe Mtima said its offices are the responsibility of Public Works.
Eastern Cape Department of Social Development had not answered our questions at the time of publication.
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