THIRTEEN municipal and town councils were owed a cumulative $379 million in rate arrears between January 2007 to December 23, 2022, reveals information that was filed in Parliament by Housing and Local Government Minister Maciu Katamotu Nalumisa.
Fiji currently has an estimated 44,749 ratepayers with about 85 per cent of ratepayers being residential ratepayers. As residents of towns and cities, people of Fiji are required, in accordance to the Local Government Act 1972, to pay town/city rates.
One reason for the increase in rates is due to a law that mandates councils to add 11 per cent compound interest rate, as per Section 78 of the Local Government Act 1972.
“Compound interest does not apply interest rates fairly for the ratepayers. The Ministry of Local Government is working on reviewing the 11 per cent compound interest to ensure that the application of interest is changed from compound to simple,” said Mr Nalumisa.
Nasinu Town Council
According to data presented in Parliament, Nasinu Town Council rate arrears is the most troublesome with unpaid rates hovering between $7 million to $11 million between 2007 to 2022. Out of the total $379,538,090 cumulative rates owed to city and town councils between 2007 and 2022, the Nasinu Town Council was owed a cumulative $142 million in this period.
The council has 11,377 ratepayers and between 2007-2011, the council did not have proper records on rates data, said Mr Nalumisa.
From 2012-106, the council had a percentage rate collection rate of 58-67 per cent. From 2017-2022, the percentage rate collection rate was between 51-83 per cent.
The collection rate reduced in 2019 and 2020 and the outstanding increased to $12m.
“Nasinu Town Council being a medium council has the second highest outstanding rates of $12 million as of 2023,” said Mr Nalumisa.
In 2009, Nasinu Town Council was owed $7.6 million; in 2020 the rate arrears was $9.1 million; in 2021 it went up to $10.3 million; and in 2022 the arrears was $11.7 million.
Lautoka City Council
8169 ratepayers owed $72.4 million to the Lautoka City Council between January 2007 to December 2022. In 2007 and 2008, the arrears were below $900k and in 2009; it skyrocketed to $4.9 million.
Rates owed hit the $5.7 million mark in 2016 and stood at $3.6 million in 2022. From 2012 to 2016, the council had a rate collection of 68-98 per cent where it managed to collect rates from the current and outstanding, yet the arrears from previous outstanding increased due to the accumulating compound interest.
“The council has a good collection of rates, however, due to the COVID impact and compound interest on arrears have led to vast increase in the outstanding from 2007-2022,” said Mr Nalumisa.
Nausori Town Council
$36.2 million was owed to the Nausori Town Council between January 2007 to December 2022 by 4,554 ratepayers, states data presented to Parliament. From 2008, there has been a steady annual increase in the rate arrears with $2.4 million owed in 2018, $2.6 million in 2019, $2.7 million in 2020, $3.1 million in 2021 and $3.5 million in 2022. “The council do not have proper records on rates data from 2007-2011. The figures have been pulled from audited FS (financial statements) which does not show rates collection separately, but collective figure for receipts from customers as the revenue for council. Thus, the rates increased in 2014 through sexennial valuation,” said Mr Nalumisa.
Suva City Council
The Suva City Council has 11,468 ratepayers and they owed $34 million in cumulative arrears between January 2007 to December 23, 2022, with the highest amount of $3.2 million owed in 2012 and the lowest amount of $75,976 in 2013. These years from 2007-2011, the council’s outstanding rates ranged increased from $2m to $2.5m due to change in new subdivision and introduction of
new unimproved capital value (UCV). The rates outstanding increased from $2.5m to $3m in year 2012 were due to the implementation of the increased rates from sexennial valuation.
“In the year 2020, the rates collection dropped to 81 per cent due to COVID and there was an increased in the rates outstanding to $3.1m. Hence, rates collection increased in 2021 post COVID and the rates outstanding reduced to $2.5m. From 2012 to 2022, the SCC had a rate collection rate of 81-99 per cent,” said Mr Nalumisa.
Lami Town Council
With only 1220 ratepayers, the Lama Town Council was owed $32.6 million in cumulative rates between January 2007 to December 23, 2022. Rates owed were highest in 2007 ($4.9m), 2008 ($5.4m) and 2009 ($6m). From 2007 to 2011 there was a collection of 74-90 per cent resulting in the reduction of the outstanding from $6m to $1m.
“The collection reduction dropped due to the increase in new subdivisions, revaluation of properties, and increase in unit cent and also increase in rates through sexennial valuation. The
council collection reduced in 2019 and 2020, however, regained its collection to 71 per cent after COVID,” said Mr Nalumisa.
Nadi Town Council
$24.6 million was owed to the Nadi Town Council between January 2007 to December 23, 2022 by 3.022 ratepayers. From 2007 to 2020, rates owed were between $1.3 million and $2.7 million. However, in 2021, rates owed dropped to $644k and stood at $683k in 2022.
Between 2007 to 2011, rates collection increased every year and inyear 2011 the council collected 77 per cent of the rates. The council from 2012-2016, managed to collect good percentage of rates
through waiver of interest and ratepayers settled the principal amounts. From 2017-2022, the collection of rates reduced due to COVID effect, but the rates collection was over 50 per cent. The rates were also increased in 2020 through sexennial valuation.
Ba Town Council
1666 ratepayers owed $13.8 million to the Ba Town Council between January 2007 to December 23, 2022. Rate arrears were between the $1.1 million range from 2007 to 2010, and reduced to
six figure sums between 2011 to 2021. Rates owed in 2022 was $1.3 million after seeing a gradual increase from 2019 ($750k), 2020 ($848k), 2021 ($984k). From 2012 to 2016, the council managed to collect 50 per cent in the year 2012, however, in the next four year the rates collection reduced to 36 per cent. There was an increase in the invoicing due sub division and rezoning.
From 2017 to 2022, due to COVID-19 pandemic the rate collection reduced to 39 per cent collection and gradually increased in its collection. The rates were increased in 2021 through sexennial
valuation.
Savusavu Town Council
634 ratepayers owed the council $6.7 million between January 2007 to December 23, 2022. The council was owed $178,683 in 2007 and $747,204 in 2022. From 2007 to 2011, the council did not have proper record keeping and documents to determine the percentage collection from 2007-2010.
“Due to increase in rates in 2016 through the sexennial valuation and COVID the rates collection fluctuated in these years yet managed to collect more than 50 per cent per year,” said Mr Nalumisa.
Labasa Town Council
1408 ratepayers owed $1.8 million to the Labasa Town Council between January 2007 to 23 December 2022. Rates owed hasn’t gone above $330k in this period with the lowest rate arrears recorded in 2008 ($40654) and the highest in 2021 ($330,234).
The collection had good collection from 2017-2020 ranging between 93-86 per cent, however, the collection dropped in 2021 to 65 per cent and then increased in to 77 per cent in 2022. The reduction in collection would have been due to the rates increased in 2020 through sexennial valuation,” said Mr Nalumisa.
Levuka Town Council
144 ratepayers owed $1.7 million to the council between January 2007 to December 23, 2022. From 2007 to 2011, the council already had arrears around $110k and gradually the team improved in its collection and managed to collect 81 per cent of rates by the end of 2011. Between 2012 to 2016, the council managed to collection majority of the current rates while the arrears had been
accumulating. The council had an increase in rates in year 2021 through the sexennial valuation.
Sigatoka Town Council
With 249 ratepayers, the Sigatoka Town Council was owed about $1 million in cumulative rates between January 2007 to 23 December 2022. The highest amount of $79 thousand was owed in 2018 and the lowest of $49,000 was owed in 2022. From 2007, the council already had arrears around $71,000 and gradually they improved in its collection and managed to collect 85 per cent of
rates by the end of 2011.
“The council’s collection dropped in 2020 due to COVID to 77 per cent thus regained its collection to 82 per cent in 2021. The rates also increased in 2021 through sexennial valuation,” said Mr Nalumisa
Rakiraki Town Council
Rakiraki was declared a town in 2010 and rates weren’t implemented until 2012. From 2013 to and 2022, 527 ratepayers owed $872k to the council. Outstanding rates recorded in 2013 were $23,805 and $107,425 in 2022.
“Rakiraki was declared as town in 2010, the rates valuation was received on 20th April, 2012 than the awareness was carried out and rates were charged from 2013. Rakiraki being the small
town with less facilitates, good percentage of ratepayers are paying the rates. Only in 2020 the rates collection was 52 per cent while other years was around 70 per cent collection,” said Mr
Nalumisa.
Tavua Town Council
311 ratepayers owed about $363k to the Tavua Council between January 2007 to December 23, 2022. Annual rates owed didn’t cross the $50k mark in this period.
The rates have not increased since 2002.
“Sexennial valuation was taken place in 2021, however, the rates increase has not been implemented. The councils invoice per year is around $64k and total outstanding is $35k from which $10k is the accumulated interest portion,” said Mr Nalumisa.
Ratepayers responsibility
Mr Nalumisa said the delay in rates payment has severely hindered the service delivery capacity and implementation of the capital projects by the municipal councils.
“I wish to re-emphasise that the ratepayers have an obligation to contribute to the costs of running the cities and towns, to be able to receive the best services and have good infrastructure in
place,” he said.
“The ministry has been continually providing waiver on interest and rates for cases where the ratepayers have been facing genuine hardship as per the Local Government Act 1972.
“In addition, positive steps have been taken by the councils to ensure that all developers will now be required to clear their rates owed to the council prior any further development being
approved. This is now a mandatory check prior to accepting building applications.”
