The Impact of the municipal billing system on revenue collection in selected South African cities

Abstract

Incorrect and inaccurate municipal billing system poses a challenge in the local government system in South Africa. The communities in the various municipalities were dissatisfied with the incorrect and inaccurate municipal bills that were being issued. Consequently public confidence in terms of the billing system dwindled, communities were unwilling to pay for the bills issued and as such debt accumulated and the municipalities could not recover the debt. The research question, therefore, is that the municipal bills sent to customers were incorrect or inaccurate and revenue was lost. Public confidence with regard to municipal billings system declined and communities were unwilling to pay for the incorrect or inaccurate bills issued. Debts accumulated and seemingly the municipal billing system had an impact on revenue collection in selected South African cities. There is currently no scientific research which has been conducted at academic level to determine the core problem as reported in newspapers, public domain and municipal areas to share the information nationally and internationally regarding the state of municipal billing system, debt and revenue management challenges. The research suggests that in order to improve the efficiency of the collection of service charges, the billing and collection systems must be decentralised, accessible to the consumer, matched with the income cycle and paying capacity of the consumer. The study covers an analysis of the municipal billing system and revenue collection in the City of Johannesburg Metropolitan Municipality, Nelson Mandela Bay Metropolitan Municipality and Ekurhuleni Metropolitan Municipality and suggests measures for financial sustainability in the three cities. The study used both the qualitative case study and the quantitative approach to effectively collect and analyse the data needed. The research problem which informs this study is incorrect, inaccurate municipal bills sent to customers and lost revenue. The result of incorrect and inaccurate bills was that public confidence declined and communities protested to pay for the incorrect, inaccurate bills issued and thus debt accumulated. In examining this problem, the research begins with a description of the context of empirical analysis, of the local government system, municipal billing system and revenue collection in South Africa. The study analysed profound issues regarding local governance systems namely: legislation, policies, procedures, public administration and its environmental factors, spheres of government, financial administration and standards, intergovernmental relations functions, municipal structure and functions, elements of municipal billing systems, sources of revenue, municipal billing systems challenges in the three metropolitan municipalities, debts accumulation and deficiency in municipal billing systems and information technology. The study recommends the need for a sound municipal billing and collection system essentially regarding the taxes levied and collected by these metropolitan municipalities. A sound municipal billing system should be configured with a short turnaround strategy to serve demand notices and the collection of dues from individual customers, thereby enabling efficient cash recycling. An efficient billing system is essential for taxes levied by municipalities and their collection from consumers. The study also provides an opportunity for further academic research in the field of municipal billing systems and revenue collection. Hopefully, this study will become a catalyst for future research, policy alternatives and planning for local government and academic institutions nationally and internationally regarding the municipal billing system and revenue collection fields.