A Research report submitted for the partial fulfilment of the requirements for the Bachelor Degree of Social Science in Economics Policy Planning of Mzumbe University.This study was set to assess the challenges in the implementation of the exemption policy at Dodoma Regional Referral Hospital in Dodoma region. The study was meant to answer the following research questions; i)What are the factors affecting effective implementation of the exemption policy in Health service delivery at Dodoma Regional Referral Hospital? Ii) What are challenges encountered in implementing exemption policy in Health service delivery at Dodoma Regional Referral Hospital? iii) What are (if any) measures toimprove the quality of services in Dodoma Regional Referral Hospital? The study employed the Cross-sectional survey to investigate the challenges in the implementation of exemption policy in health care facilities at Dodoma Regional Referral hospital. The study population included 192 people, selected from the health workers at Dodoma Regional Referral hospital.The sampling technique employed was judgmental sampling to managerial staff. The study adopted the interview and questionnaire as the methods of the data collection. The results show that the organization was able to implement the policy in some parts. However, some challenges lead to the ineffectiveness in the implementation of the healthcare exemption policy. The hospital lacks some of the medicine and medical equipment and other requirements needed for patients. Other challenges were most of the beneficiaries lack enough exemption policy knowledge in its procedures for a person to be exempted,beneficiaries understand mostly their mother tongue language (Kigogo) which becomes difficult in communication between health workers and the patients. The hospital has no special budget to implement the exemption policy which led to inadequate revenue sources. This resulted to the ineffectiveness in the implementation of the healthcare exemption policy.The study recommends that the hospital should generate its internal revenue sources since the finances from the central government come late will make the hospital able to support itself at the time of deficiencies.