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Councils miss revenue collection targets

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Willy Kambwandira

The National Local Government Finance Committee (NLGFC) has revealed that only K14 billion out of the K21 billion target was collected by the country’s 35 councils in the July 2021 to March 2022 fiscal year.

NLGFC Financial Analyst Jonathan Banda told The Daily Times that most councils continue to struggle, citing the Covid pandemic among contributing factors.

“Councils’ failure to improve on service delivery is [another factor] that is also limiting their ability to collect more revenue from vendors.

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“A few councils that managed to perform better did so as a result of windfall type of revenue such as selling of plots in some new locations. But targeting their revenue collection on traditional revenue has been unrealistic for the majority of councils,” he said.

Banda said reports from some councils indicated most markets have not been operating at their optimal level because of the pandemic, which has also affected revenue targets.

“But the councils can meet collection targets if they provide all the necessary services to vendors. We have markets which are operating without toilets and shelters which, in a bigger way, discourages vendors from paying market fees,” he said.

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For city councils, Banda blamed city authorities for not updating their Quinquennial Valuation books to include new buildings that have been constructed but are not paying City rates. This, he said, can help improve the revenue base in most cities.

In a separate interview, Malawi Local Government Association (MALGA) Executive Director Hadrod Mkandawire said it is regrettable that councils are under-collecting, despite having the potential to beat their targets.

Mkandawire said this is a result of the citizen’s reluctance to pay market fees and city rates due to what is called political action.

“Most Malawians are not willing to pay market fees or city rates because the councils do not have the mandate to punish people who are not paying market fees. People are willing to pay taxes to Malawi Revenue Authority but they are not willing to pay to councils because they know MRA can punish them unlike the councils.

“We have also noted that some councils struggle to collect rates from building which are owned by politicians. This is sad, considering that there are some politicians who force their followers not to pay market fees when there are some disagreements,” he said.

Centre for Social Accountability and Transparency (CSAT) Executive Director Willy Kambwandira said the fact that councils collected K14 billion in a year demonstrates that local councils can collect more and beat targets if they can enhance their capacity, improve on service delivery and curb corruption, which has become rampant.

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