Factors Influencing Revenue Collection In Selected Local Government Authorities In Tanzania

ABSTRACT

The study examines factors affecting revenue collection in Local Government Authorities in Tanzania. Specifically, the study focused on identifying revenue sources in selected six LGAs (Kilolo, Uvinza, Nyang’wale, Rorya, Chemba and Kakonko), to determine the influence of internal control system in revenue collection, organization factors, and individual characteristics of the responsible personnel in revenue collection in selected LGAs. A cross section research design was employed whereas a sample of 92 respondents from six selected Local Government Authorities in Tanzania was involved. Purposive sampling was used to select respondents who are involved in revenue collection. Data were collected through questionnaires and documentary review. Both descriptive and inferential statistics were used to analyze quantitative data. To establish the relationship between internal control system, organization factor, individual characteristics and revenue collection, multiple linear regression model was used where R2 was applied to measure the explanatory power of the model. The research findings indicated that business license fee, service levy, land rent , hotel/guest house levy, bus stand levy, parking fee , market dues, producecess, billboard fee, Magulio fees, public toilet, livestock market levy and liquor license were found to be the major source of revenue in selected Local government Authorities in Tanzania. Moreover, the study found that, internal control system particularly internal audit,monitoring as well as technology , location of tax payers, working environment, training and good governance as organization factor and age, education level as well as experience which are individual characteristics have a significant and a positive influence on revenue collection of LGA’s in Tanzania. The study concludes that the internal control system, organization factor and individual characteristics are important factor influencing revenue collection in most of LGAs in Tanzania. The study recommends that Local government Authorities in Tanzania should improve on their relationship with the public by engaging community leaders, business representative and other stakeholders to plan for local revenue collections. Also the government should create a good working environment for tax payers particularly on provision of training and workshops on governance issues as well as including infrastructure for improved performance and enhanced revenue collection.