DEBT COLLECTORS START COLLECTING

So much for thinking that this particular piece of "red tape" compliance was over and done with - seems like it has resurrected itself specifically to come and bite you in the a*&e! Seems like defaulters will just have to cough up and pay.

Regards
Nikki


Carvin Goldstone
October 04 2006 at 11:15AM

At least 18 000 businesses operating in the eThekwini municipality should expect a visit from debt collectors, who have been commissioned to collect R92-million in outstanding business levies owed to the city.

Finance Minister Trevor Manuel announced in 2005 that business levies would be scrapped from June 2006, losing the city close to R600-million in potential revenue.

The levies had been used to fund a variety of programmes, including Durban Africa, the expansion of the International Convention Centre and the Point Precinct Development. The city has since had to seriously consider the lost funding.

City Treasure Krish Kumar was unavailable for comment, but a Treasury insider said income from levies had been partially replaced by an interim grant from the national government and the zero rating of the property tax, until a sustainable form of income was established. The source said no new source of income was immediately available, but the city hoped that the grant from the National Treasury would be increased

Members of the city's executive committee agreed on Tuesday that efforts would now be concentrated on the collection of R92-million in unpaid levies from the 18 000 defaulters.

The city would also re-shuffle staff to fill vacancies in the Revenue and Arrears Management Department to help facilitate the process. The city has also been approached by a collection agency from Gauteng which was not named on Tuesday's executive committee meeting which claims to have about R30-million of levy income due to the council, which it would release at a commission of 15 percent.

The DA asked that the name of the company collecting levies on behalf of the city be brought to the committee.

However, the city's operating budget has not made provision for the payment of commissions to collection agents, because none were appointed.

A report tabled before the executive committee on Tuesday stated that there could be similar submissions from other debt-collection agencies as winding-up procedures were established nationally.

"It is in council's interests that such avenues of extraneous income are pursued promptly, and that commission rates paid be deemed to be fair and reasonable. Every effort will be made to negotiate the commission to the lowest level possible," read the report.

The committee decided that Kumar would be authorised to negotiate a commission rate not to exceed 15 percent with collection agents who have access to business levy funds that are due and payable to the council.

The committee also agreed that R5-million would be transferred from the legal service division for commission and debt collection services.




This article was originally published on page 2 of The Mercury on October 04, 2006