Abstract. Full text article available at http://www.inkanyiso.uzulu.ac.za/journals/vol12i2/06%20Kessy%2002%20Jan%20prs.pdfTransparency is an essential tool of local governance which enables the local citizens to hold local institutions accountable for their performance, to foster trust in government, minimize corruption and improve local service delivery. Accountability and transparency have been on the top of agendas in all the local government reforms in Tanzania. For transparency to work properly, it needs effective structures of implementation. Within the local government system in Tanzania, the structures of transparency are present but appear to be not working as they should do. This paper seeks to assess the extent to which the problems of transparency have persisted under the new phase of local government reforms and how they are likely to impact on local service delivery in Tanzania. The purpose of this study was, therefore, to examine the extent to which fiscal transparency in local governments in Tanzania is practised and how this has played a greater role in service delivery. The study used a case study of purposively selected local councils in Tanzania to examine the dynamics of fiscal transparency and service delivery. The findings show that there is little flow of information from higher levels of local governments to the lower levels in relation to resources available and results achieved. The information received from the councils is sometimes opaque or fuzzy in the sense that it does not reveal all about what their leaders do or what important decisions have been made about their councils. The study concludes that the importance of accountability and transparency attached to service delivery in any country is essential for good practice in local governance. Hence, instruments for accountability and transparency at the local levels must be enhanced to enable public institutions and public officials to be responsive to the citizens.