Local government revenue enhancement : a case study of Umsobomvu Local Municipality
Thesis (MPA)--Stellenbosch University, 2019.
ENGLISH SUMMARY : Own sources of revenue within the local government are the most critical means of promoting the fiscal autonomy. Therefore, debt collection, indigent management, credit control management, meter reading, billing accuracy, cash flow planning and tariff determination are crucial elements of revenue enhancement for financial sustainability. The socio-economic and fiscal context for local government, highlights wide variation in social and economic contexts that are key amongst the local South African government. Intergovernmental relations describe the key elements of the local government fiscal framework and how it relates to municipalities. The need to get the basics right in relation to revenue management and the collection of consumer debtors and under-pricing of services is of extreme importance. The research question, therefore, is how South African municipalities can enhance revenue amidst the overwhelming socio-economic odds. The study explores the municipal revenue enhancement within South African local government and challenges faced by Umsobomvu Local Municipality in enhancing their own source of revenue. Furthermore, the study described the legal and regulatory context of South African municipalities, identified strategies to overcome the challenges of revenue enhancement and provided recommendations on how the local government can maximise their own sources of revenue. The study was conducted by arranging semi-structured interviews by means of questionnaires with the target group. The purpose of the semi-structured interviews by means of questionnaires is to obtain primary data from the target group. The semi structured interview conducted by means of a survey questionnaire provides for detail instruction, with open and closed ended question. The study explore challenges the collecting of outstanding debt from the municipal debtors that resulted in negative cash flow that created poor services delivery. Furthermore, national fiscal policy give municipalities the space to respond appropriately to these challenges and the ability of municipalities to rise to these challenges will ultimately be determined by the quality of their governance and administrative practices. The study recommends other sources of revenue that the South African local government can explore to maximise its own sources of revenue. Municipal Revenue Enhancement is on the integrity of the two components namely metered service delivery and billing. The local government sources of revenue and other revenue being internally and externally generated will be impacted by the sound or poor quality municipal billing system under any financial period. Municipalities should ensure that adequate processes and procedures are in place to ensure that all services rendered (tariffs, rates and other) are correct and complete billed for and timeously recovered to allow to the smooth running and functioning.
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