News / National
Gwanda demands over $7 million from Zinwa
22 Jun 2017 at 07:08hrs | Views
GWANDA municipality is demanding more than $7 million from Zinwa which it said the water authority owes for services that included provision of chemicals, repair and maintenance of the water treatment plant.
The council said Zinwa also owed the municipality money for overcharging water as estimated bills were issued to the local authority and also Value Added Tax which was charged by Zinwa but council could not pass it to domestic consumers.
The water authority has been fighting the local authority over a $10 million debt for water supplied.
The local authority maintains that it owes Zinwa less than $3million.
In his report yesterday to the seven-member commission of inquiry set up by the Minister of Environment, Water and Climate, Oppah Muchinguri- Kashiri, the council's treasurer, Mr Xolani Dube said what Zinwa was demanding will be drastically reduced if what it owes council is subtracted.
The commission led by Deputy Director Water Resources Management in the Ministry Engineer Gilbert Mawere is in Gwanda to assess the town's capacity to run the water treatment plant.
Mr Dube in his debt liquidation plan said: "According to Zinwa, council owes $10 078. Be this as it may, the issue of VAT still remains a sticking issue taking cognisant of the fact that domestic consumers are zero rated for VAT purposes and they constitute 73 percent of our customers. On the side of Zinwa VAT is charged on all users, hence council is expected to absorb the figure," said Mr Dube.
He said interest makes the bulk of the debt to Zinwa and it was not clear what rate of interest was being charged on their account by Zinwa as it kept fluctuating.
Mr Dube said Zinwa estimated bills when its bulk water meters were not working and that contributed to the ballooning of the council debt.
"Water chemicals were supplied to Zinwa by council for a long time but the value of these chemicals was not subtracted from the bills or price of water charged. These amounted to $108 328. We believe that once these are addressed the debt shall reduce drastically to just less than $3 million."
Government has approved the take over of the town's water treatment plant by council and the committee set up is meant to facilitate the smooth takeover.
The council said Zinwa also owed the municipality money for overcharging water as estimated bills were issued to the local authority and also Value Added Tax which was charged by Zinwa but council could not pass it to domestic consumers.
The water authority has been fighting the local authority over a $10 million debt for water supplied.
The local authority maintains that it owes Zinwa less than $3million.
In his report yesterday to the seven-member commission of inquiry set up by the Minister of Environment, Water and Climate, Oppah Muchinguri- Kashiri, the council's treasurer, Mr Xolani Dube said what Zinwa was demanding will be drastically reduced if what it owes council is subtracted.
Mr Dube in his debt liquidation plan said: "According to Zinwa, council owes $10 078. Be this as it may, the issue of VAT still remains a sticking issue taking cognisant of the fact that domestic consumers are zero rated for VAT purposes and they constitute 73 percent of our customers. On the side of Zinwa VAT is charged on all users, hence council is expected to absorb the figure," said Mr Dube.
He said interest makes the bulk of the debt to Zinwa and it was not clear what rate of interest was being charged on their account by Zinwa as it kept fluctuating.
Mr Dube said Zinwa estimated bills when its bulk water meters were not working and that contributed to the ballooning of the council debt.
"Water chemicals were supplied to Zinwa by council for a long time but the value of these chemicals was not subtracted from the bills or price of water charged. These amounted to $108 328. We believe that once these are addressed the debt shall reduce drastically to just less than $3 million."
Government has approved the take over of the town's water treatment plant by council and the committee set up is meant to facilitate the smooth takeover.
Source - chronicle
