There has been mixed reaction to the City of Tshwane's proposed massive debt write-off, which could see up to R10 billion in debt cancelled for residents struggling to service their outstanding municipal accounts.

The proposal is outlined in a recently-approved council report, which revealed that the City is grappling with a whopping R30bn in unpaid debt.

The City's debtors have been broken down into several categories, which include residential customers saddled with a total debt of R15,833bn, followed by business customers, who owe R6.746bn.

Indigent customers owe R2,632bn, the government owes R1,793bn and inactive accounts make up the remaining R1,751bn.

Regarding the proposed R10bn debt relief, the report said: “Analysis of the proposal for residential accounts as of 30 November 2024 indicates that should customers take-up the offer an amount of R1,765bn will be for immediate collection and R4,220bn will be subject to deferred collection. The debt-relief component amounts to R9,847bn constituting 70% of the total debt.”

There are, however, conditions attached to the proposal, with one stipulating that customers must first pay in full all debt accumulated over the last 12 months to qualify for debt cancellation.

The proposal also extends to businesses with outstanding accounts, offering a 100% write-off for debts older than three years.

To qualify, businesses must settle in full all outstanding debts incurred within the last three years.

An additional debt-relief measure for businesses includes a 100% write-off of interest and miscellaneous charges provided they settle all outstanding debts less than three years old.

If businesses accept the first offer, an amount of R2,652bn will be available for immediate collection, while R3,976bn will be written off.

For an alternative offer related to businesses, an amount of R1,916bn will be available for immediate collection, and interest and miscellaneous charges totaling R2,381bn will be written off.

The proposal will also benefit child-headed households, indigents and customers with property values of less than R250,000 by receiving a 100% debt write-off, totaling R10,9 million.

The City will write off 100% of debts older than two years, totaling R625,739,650 for the deceased estates on condition that their outstanding debts have been paid off.

DA's Jacqui Uys, former Finance MMC, expressed concerns over the programme, saying it primarily benefits those who could pay their accounts, but chose not to.

“Property of deceased owners are still required to pay off two years of their debts before they are written off. This does not help somebody who has inherited an RDP house in the township and cannot afford it because their parents who they inherited this from should have been indigent,” she said.

Freedom Front Plus councillor Peter Meijer rejected the proposal, saying it sends the wrong message as it rewards account defaulters and punishes loyal customers.

Deputy Mayor Eugene Modise, who is also Finance MMC, said the City didn't take a blanket approach in the application of the debt-relief programme.

For example, he said the City considered the fact that child-headed households, indigents and customers with property values of less than R250,000 will never be able to pay.

He said during the recent imbizos by the new political executive many people confessed that they have tampered with meters, but they are willing to pay.

The City proposed an amnesty to customers who have tampered with their meters, urging them to come forward within a 30-day window for their penalty fees to be waived.

Modise said the amnesty option was to assist the City to increase its revenue.

rapula.moatshe@inl.co.za

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Mixed reaction over Tshwane's proposed R10 billion debt relief for unpaid bills