The impact of VAT on service delivery in Ditsobotla Local Municipality

Abstract

The purpose of this study is to find out the impact of VAT on service delivery in the Ditsobotla local municipality. VAT is currently charged on municipal services in South Africa and this charge makes the services more expensive. Currently, the residents of Ditsobotla municipality owe millions of rands to the local municipality. Over the past years there have been numerous protests by residents over poor service delivery. This study therefore intends to find the impact of VAT on the ability of the municipality to deliver equitable services to the residents. The study adopted a mixed methods approach as well as an explanatory sequential mixed methods research design. The quantitative data was analyzed using SPSS while the qualitative data was analyzed using a thematic content analysis. The study found that VAT has a negative impact on service delivery in the Ditsobotla local municipality. The findings of the study also disclosed that Ditsobotla municipality provides basic services to the residents even though some residents do not pay for services rendered . The findings also indicate that residents receive services based on the way they pay for their municipal services, further deducing that a decrease in VAT proceeds invariably affects the rate of service delivery. It was also inferred that the residents do not have relevant knowledge of VAT. The study recommends that the Ditsobotla municipality should find ways to enhance payment compliance such as initiating awareness campaigns. The municipality should render services to the residents equally as this might assist them in honoring their payments. The study also recommends that the residents should be allowed to enquire about their service bills so that they have some knowledge of VAT levy and the importance of paying VAT.