THE Bulawayo City Council has announced a $507 million supplementary budget which will see rates going up by a whopping 300% if central government approves it.
Bulawayo has also proposed a $2, 8 billion budget for 2020 which will also see tariffs going up further by 416%.
Presenting the two budgets in Council Chambers on Monday, the Acting Finance and Development Committee chairperson, Mzama Dube said the drastic upward review of the rates has been necessitated by a cocktail of government’s fiscal policies which include the introduction of the local currency as sole legal tender through Statutory Instrument 33 of 2019.
“The economic environment has dramatically changed since the beginning of the year. This comes on the backdrop of significant monetary and fiscal policy changes which were announced by the government during the first half of the year. As a result of these changes, the council budget for year 2019 which had been crafted in September 2018 was negatively affected,” said councillor Dube.
Dube said the council’s revenue stream has also been affected by the introduction of the 2% Intermediated Money Transfer Tax (MITT) which was announced by Finance Minister Mthuli Ncube in October last year.
“The introduction of 2% of Intermediated Money Transfer Tax (IMTT) has increased council costs. The volumes of transactions done by the city makes the tax a very significant expense to council. Service providers have continuously hiked their prices in line with the exchange rates and inflationary pressures facing the economy,” he said.
According to the Zimbabwe National Statistics Office, year on year inflation for the period to 30 June 2019 increased from 97.85% in May 2019 to reach an all-time high of 175.66% in June 2019.
Dube added that the exorbitant prices of fuel and water chemicals are some of the factors which have necessitated the sharp tariff increment.
“Fuel is a big component of service delivery and its continual increase has made it difficult for council to fulfill its obligations such as attending to sewerage spillages and water bursts which must be added to promptly minimise the negative impact on residents and reduce water losses and save on cost,” said Councillor Dube.
The presentation of the two budgets has been postponed twice due to serious disagreements between councillors and management.
