Zimbabwe Electricity Transmission and Distribution Company (ZETDC) has applied for a declaratory order at the Harare High Court seeking to bar the country’s 32 urban councils from collecting rentals on the company’s infrastructure (way-leave tax).
If the order is granted, local authorities stand to collectively lose $16 million annually in potential revenue. It is reported that most towns charge anything from $500 000 in way-leave tax and ZEDTC substations and related equipment.
The power company is represented by Muza and Nyapadi Legal Practitioners and have since written to all the urban councils about their course of action.
Wrote ZETDC’s lawyers in a court application dated April 20: “Take note that the applicant intends to apply to the High Court in Harare for an order in terms of the draft order annexed to this notice and that accompanying affidavit and documents will be used in support of the application.
“If you intend to oppose this application you will have to file the notice of opposition together with one or more opposing affidavits, with the Registrar of the High Court at Harare within 10 days.”
The company argued that the way-leave tax was outside the provisions of the Urban Councils Act and that it was unlawful without a supportable Statutory Instrument.
A source close to the matter said ZEDTC’s action was based on a Supreme Court case, where it successfully challenged the payment of way-leaves and development levies to 60 rural district councils in 2014.
The judgment was delivered by Justices Luke Malaba, Tendai Uchena and Antonia Guvava on January 4, 2015.
“The levying of way-leave charges is outside the provisions of Section 76 of the Rural District Councils Act (chapter 29:13) and is therefore unlawful,” reads part of the judgment.
The secretary-general for the Urban Councils Association of Zimbabwe (UCAZ), Mr Livison Mutekede, said the move by ZETDC would affect local authorities’ revenue inflows.
“We are opposing the application as UCAZ,” he said. “There is no way we will fold our hands. They have to pay for the use of our land like any other institution or ratepayers. “We stand to lose a lot of revenue. These way-leave charges are used for generating revenue.”
Chairperson of the town clerks’ forum Mr George Makunde said the local authorities agreed in principle to challenge the court application by ZETDC.
He said they had assembled a legal team to defend their case. “Yes, ZETDC has taken us to court and all the 32 urban councils are cited as respondents,” said Mr Makunde.
“It is unfortunate that I cannot comment much on a matter which is before the courts, but what I can only tell you is that all our members have since filed their opposing affidavits.”