Malawi Local Government Association (Malga) says weak laws governing enforcement of city rates payments are frustrating effective service delivery as they favour defaulting property owners.
Malga executive director Hadrod Mkandawire said this in an interview yesterday in the face of revelations that property owners in the country’s four cities of Lilongwe, Blantyre, Zomba and Mzuzu owe the councils K18 billion, a 28 percent jump from the K14 billion reported 11 months ago.
He said the current legal framework is weak and leaves the councils distressed for funds.
Mkandawire has since asked the Parliamentary Local Government Committee to push for the tabling of the Local Government Amendment Bill in Parliament which, he said, would give the councils immunity from being at the mercy of politicians.
He said: “If we are to make the laws guiding councils effective, then the amendment Bill should go to Parliament, be passed and enacted into law because the proposed amendment has the ability to empower the councils which will as well strengthen councils on debt collections.”
Mkandawire also blamed the central government for shrinking the councils’ revenue envelope further by taking a share through collection of licence fees for chain stores such as Shoprite, Game Stores, Spar and Sana, yet it is councils that provide services to such businesses.
Of the K18 billion property rates arrears, Lilongwe City Council is owed K11 billion, up from K9 billion last October while Zomba City Council is owed K3.4 billion, representing a 36 percent increase from K2.5 billion in 2021.
Mzuzu City Council is owed K1.9 billion.
On the other hand, Blantyre City Council reduced the arrears from K2.6 billion last October to K1.7 billion.
Blantyre City Council director of commerce and industry Dennis Chinseu said in an interview yesterday the council managed to reduce the arrears due to the support of councillors.
“We previously faced problems with property owners which is still the case now, but with the local councillors’ intervention, we have seen a decline. Most of the time, the councillors accompany us on enforcement missions to collect payment,” he said.
But unlike Blantyre, Lilongwe City Council secretariat and councillors have had a strained relationship which came to light last year after the council sealed Malawi Congress Party headquarters complex at City Centre in a desperate bid to push for payment.
The council secretariat’s move angered councillors, led by former mayor Juliana Kaduya, who faulted the decision and retaliated by ordering the shutdown of council offices. Former chief executive officer John Chome was, in the process, forced to go on leave.
Responding to our questionnaire yesterday, Lilongwe City Council spokesperson Tamara Chafunya said failure to enforce some measures such as closing offices is letting down the council from forcing the property owners to pay rates.
She said: “Much as we keep engaging the defaulters on payment of rates, there is a challenge as most tenants find it hard to comply voluntarily without other measures such as closing offices which we haven’t been applying for almost a year now.”
Zomba City Council director of finance Francis Mafunga said government institutions were among the top defaulters.
He said: “At least some private companies try to comply, but not government institutions. Of the K3.4 billion we are being owed, most of it is what the government institutions are supposed to pay. To us, this is a lot of money that can change the face of Zomba.
“But regrettably, we are even unable to provide basic services and sometimes we reach a point where we owe service providers.”
According to Mafunga, the inability to collect the tax through rates has led to the council owing Malawi Revenue Authority about K1 billion in unpaid tax obligations.
Parliamentary Local Government Committee chairperson Chimwemwe Chipuwa yesterday said the Local Government Act Amendment Bill will be presented when Parliament reconvenes in November this year.
“The committee wants the 2017 Act reviewed to enhance the law to ensure councils have more power on revenue collection,” he said.
The councils use part of the collections to provide services such as refuse collection, sanitation, street lights, maintenance of roads and others.