A dissertation submitted in partial fulfillment of the requirement for the
Master’s degree of Business Administration-Corporate Management
(MBA-CM) of Mzumbe university
Low revenue collection in local governments in Tanzania has long been a constraint
to achieving the local governments’ projects, as reports show low collection rate in
rural and urban districts in Tanzania. The general objective of this study was to
assess the factors contributing to inefficient revenue collection in local government
authorities in Temeke and Kigamboni-Tanzania. Specifically, the study sought to
address four objectives: to determine the extent to which the sources of revenues in
Temeke and Kigamboni Municipal councils affect their revenue collection; to assess
the effectiveness of tax laws on revenues collection in these municipalities; to
determine the capacity of the available human resources in collecting revenues in
these municipalities and to assess the effectiveness of tax education on revenue
collection in these municipalities.
The study used Temeke and Kigamboni Municipal Councils as study cases and
purposive and convenience sampling techniques to sample a total of 90 respondents.
Questionnaire, interviews and documents review were used to collect data bases on
study objectives. Findings have shown that, insufficient sources of funds in the
municipal councils contribute to inefficient revenue collection as they only depend
on tax/fees, central government support, and foreign aid. With human resource, the
study found low capacity and capabilities of municipal workers in revenue
collection. Also, there is lack of appropriate tax education to taxpayers. Laws were
found contributing to efficiency as they govern revenue collection.
The study recommends the need to widen the municipalities’ tax base by allocating
property tax and local government workers’ Pay as You Earn tax to be collected by
the Local Government Authorities. This will increase their own sources of revenue
and reduce dependency on Central Government support and donations. There is also
a need of providing appropriate training to workers on how to collect revenues, use
modern technology in revenue collection, employing more workers, and provide tax
education by using appropriate means (media) to reach to stakeholders (taxpayers).