City of Ekurhuleni set to lose R15bn in revenue with debt write-off plan
The city has approved a proposal to aid financially strained residents by writing off 70% of their municipal debts, including rates, taxes, and other bills.
FILE: A view of the City of Ekurhuleni's civic centre entrance. Picture: Thabiso Goba/Eyewitness News
JOHANNESBURG - The City of Ekurhuleni is set to lose close to R15 billion in revenue as it plans to write off debt owed by households and businesses.
The city has approved a proposal to aid financially strained residents by writing off 70% of their municipal debts, including rates, taxes, and other bills.
The offer is, however, only available to households whose municipal accounts have been in arrears for more than 12 months.
Households and businesses in Ekurhuleni collectively owe the metro more than R25 billion, with residents accounting for 80% of this total debt.
Despite the city’s debt write-off initiative resulting in an anticipated loss of nearly R15 billion, Finance MMC Jongizizwe Dlabathi said that this step was necessary to reduce consolidated consumer debt.
"Our debtor's books have been increasing exponentially. At some point, we were sitting at R18 billion. It went up to R23 billion and now we are sitting on R25 billion."
Dlabathi said that his initiative to write off household debt was also aimed at encouraging residents to pay their bills regularly.