The Zimbabwe Electricity Transmission and Distribution Company has taken all the 60 rural district councils in Zimbabwe to court contesting payment of annual unit tax and way leave charges that are being claimed by the local authorities. Way leave charges and unit tax are levied on ZETDC for the power-lines that pass through the 60 districts and the substations established in the areas throughout the country.
Since dollarisation of the economy in 2009, ZETDC has not been paying the fees and the bills are collectively running into millions of dollars considering that each of the councils charge ZETDC unit tax and way leave charges in the range of US$20 000 to US$50 000 per year. The councils, in terms of the Rural District Councils Act, have separately sued ZETDC and several default judgments have been granted throughout the country and the power utility’s property faces attachment.
ZETDC argues that the councils are misinterpreting the RDC Act and that the High Court should intervene and declare the levies to be unlawful.
Muza and Nyapadi law firm is instructing Advocate Thabani Mpofu in representing ZETDC while Mr Charles Warara of Warara and Associates is acting for most of the councils. ZETDC argues that it is in the business of transmission and distribution of power to the whole country including the 60 councils.
It argues that unit tax, according to Section 97A of the RDC Act, is applicable to A1 and A2 farmers who are holders of a lease or permit to occupy the land and that ZETDC should be exempted.
“Applicant is clearly not a beneficiary of the land reform programme, it holds no lawful authority in the form of a lease or offer letter and is accordingly not liable to such tax.
“The levying of such tax is therefore patently bogus,” read an affidavit by ZETDC company secretary and legal adviser Ms Judith Tsamba.
ZETDC argues that none of the 60 councils has a right to charge the taxes “that they have imposed”.
Levying of way leave charges, according to ZETDC, was not supported by any law and that it should not be done. Section 96 of the Act, ZETDC argues, makes it clear that the councils can only charge development tax and not the disputed charges.
Ms Tsamba, in her affidavit, states that even if the levies were lawful, they were excessively high considering that ZETDC was simply providing a service to the nation by transmitting and distributing power.
“At any rate, the amounts charged are so high as to induce a sense of shock and they defy all logic.
“These are only transmission lines and stations, applicant requires nothing from respondents save for safe passage. Given that the applicant actually provides a service to respondents in the process of enjoying safe passage, then the charges are plainly outrageous and cannot otherwise be saved,” read the affidavit.
The councils are strongly opposed to the application and they have separately filed their notices of opposition.