Big busi­ness not pay­ing rates, ser­vices

The Star Late Edition - - FRONT PAGE - ANNA COX anna.cox@inl.co.za

ABOUT 2 000 busi­ness ac­counts have been de­lib­er­ately re­moved from the City of Joburg’s billing database, re­sult­ing in the ac­count hold­ers not pay­ing their mu­nic­i­pal rates and ser­vices.

Mayor Her­man Mashaba has ex­pressed grave con­cern over the large num­ber of big busi­nesses – in­clud­ing ma­jor ter­tiary in­sti­tu­tions – who fail to pay for ser­vices and whose de­tails have dis­ap­peared from the database.

Mashaba has writ­ten to the chief ex­ec­u­tives of the SA In­sti­tute of Char­tered Ac­coun­tants (Saica) and the In­de­pen­dent Reg­u­la­tory Board for Au­di­tors (IRBA) to raise these con­cerns.

It is es­ti­mated that the city is los­ing be­tween R7 bil­lion and R10bn in revenue a year as a re­sult of m u n i c i p a l a c c o u n t s hav­ing been r e m o v e d u n l awf u l l y from the billing sys­tem.

“I have re­quested the in­ter­ven­tion of Saica and IRBA to en­sure its mem­bers are aware of these chal­lenges and to ad­vance greater eth­i­cal prac­tices when it comes to ac­count­ing, and the au­dit­ing of busi­nesses in Joburg.

“Of par­tic­u­lar con­cern to me is the num­ber of well­known busi­nesses and es­tab­lish­ments that have been iden­ti­fied as not pay­ing for mu­nic­i­pal ser­vices,” he said.

The mayor gave the fol­low­ing ex­am­ples:

About R30.5 mil­lion was col­lected from a com­pany whose ac­count was in ar­rears. The com­pany has also en­tered into an ac­knowl­edge­ment of debt to set­tle the out­stand­ing bal­ance of R23m over a pe­riod of six months.

In a sep­a­rate mat­ter, the city re­ceived a pay­ment com­mit­ment of about R55m from two com­pa­nies whose ac­counts are in ar­rears.

An­other com­pany, sit­u­ated in the west of Joburg, owes the city just over R48m.

A higher learn­ing in­sti­tu­tion in Braam­fontein has a debt of R7.6m.

A shop­ping mall owed the city R5m, but when the ac­count was revisited, the charges on the ac­count were re­duced to R2m.

“It is shocking that there are city of­fi­cials col­lud­ing with busi­ness peo­ple to have their mu­nic­i­pal ac­counts deleted from the city’s database. There are nu­mer­ous such cases cur­rently un­der in­ves­ti­ga­tion,” Mashaba said.

On Fe­bru­ary 6, the city launched Oper­a­tion Buya Mthetho – a multi-de­part­men­tal oper­a­tion aimed at en­forc­ing by-laws and restor­ing the rule of law in Joburg.

It is a joint oper­a­tion be­tween all key city de­part­ments and en­ti­ties, such as the city’s group foren­sic and in­ves­ti­ga­tion ser­vice (GFIS); Joburg metro police depart­ment; e n v i r o n - m e n t a l health; so­cial d e v e l o p - ment; in­fras t r u c t u r e ser­vices; the city’s le­gal depart­ment; and de­vel­op­ment plan­ning.

The oper­a­tion tar­gets prop­er­ties across Joburg that are not pay­ing for mu­nic­i­pal ser­vices.

To date, Oper­a­tion Buya Mthetho has re­sulted in the city col­lect­ing R341m in un­paid mu­nic­i­pal rates and taxes in just three months.

“The num­ber of busi­nesses fail­ing to pay their mu­nic­i­pal debts or who have dis­ap­peared from our billing sys­tem al­to­gether is alarm­ing, and re­quires ur­gent ac­tion, the mayor said.

“Given the ex­tent of this prac­tice, it con­cerns me that such in­ci­dents are not be­ing picked up by ac­coun­tants and au­di­tors at these com­pa­nies.

“Ac­coun­tants and au­di­tors, in gen­eral, need to make a greater ef­fort to en­sure that busi­nesses hon­our their debts to lo­cal govern­ment for ser­vices that are ren­dered, and that they pay their rates and taxes timeously,” Mashaba added.

Col­lud­ing with of­fi­cials to delete their ac­counts from database

@an­na­cox

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