Taxation and Local Government Performance in Tanzania: A Case Study of Kinondoni Municipal Council Dares Salaam

TABLE OF CONTENTS

Declaration ................................................................................................................................... .i

Approval ....................................................................................................................................... ii

Dedication .................................................................................................................................. iii

Acknowledgment ...................................................................................................................... .iv

Table Of Contents ...................................................................................................................... v

List of acronyms ....................................................................................................................... .ix

List Of Tables .............................................................................................................................. x

List Of Figures ........................................................................................................................... xi

Abstract ...................................................................................................................................... xii

CHAPTER ONE .......................................................................................................................... 1

INTRODUCTION ........................................................................................................................ !

1.0 Overview ................................................................................................................................ !

1.1 Background of the study ................................................................................................. !

1.2 Statement of the problem ................................................................................................ 3

1.3 Purpose of the study ........................................................................................................ .4

1.4 Objectives of the study .................................................................................................... .4

1.5 Research questions ........................................................................................................... .4

1.6 Scope of the study .............................................................................................................. 5

1. 7 Significance of the study .................................................................................................. 5

1.8 Conceptual Framework .................................................................................................... ?

CHAPTER TW0 .......................................................................................................................... 8

LITERATURE REVIEW ........................................................................................................... 8

2.0 Introduction ......................................................................................................................... 8

2.1 Definitions Of Concepts ................................................................................................... 8

2.2 Relationship Between Taxation And Local Government Performances ........... 9

2.3 Impact OfTaxation ............................................................................................................ 9

v

2.4 Types of taxes levied by the local government ........................................................ II

2.4.1 Income taxes/ services levy ...................................................................................... !!

2.4.2 Business Privilege Taxes ............................................................................................ !!

2.4.3 Sales Related Taxes ..................................................................................................... 12

2.4.4 PropertyTaxes ............................................................................................................... 12

2.5 Principles Of An Effective Taxation Mechanism .................................................... 13

2.5.1 Equality /Equity ............................................................................................................ 13

2.5.2 Economy .......................................................................................................................... 13

2.5.3 Certainty .......................................................................................................................... l4

2.5.4 Convenience ................................................................................................................... l4

CHAPTER THREE .................................................................................................................. 16

METHODOLOGY ..................................................................................................................... 16

3.0 Introduction ....................................................................................................................... 16

3.1 Research design ................................................................................................................ 16

3.2 Study area .......................................................................................................................... 16

3.3 Research population ....................................................................................................... 17

3.4. Sample design .................................................................................................................. I?

3.4.1 Sample method and procedures .............................................................................. I?

3.4.2 Sample selection and size .......................................................................................... IS

3.5 Data collection and instrument ................................................................................... IS

3.5 .1 Structured questionnaires ........................................................................................ 18

3.5.2 Documentary review .................................................................................................... 19

3.5.3 Data Collection .............................................................................................................. l9

3.5.4 Primary data ................................................................................................................... 19

3.5.5 Secondary data ............................................................................................................. .20

3.6 Data processing and analysis ...................................................................................... 20

3.6.1 Editing .............................................................................................................................. 21

3.6.2 Coding .............................................................................................................................. 21

3.6.3 Tabulation ....................................................................................................................... 21

3.7 Data analysis ..................................................................................................................... 22

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3.7.1 Quantitative Data Analysis ....................................................................................... 22

3.7.2 Qualitative Data Analysis .......................................................................................... 22

3.8 Statistical treatment of data ......................................................................................... 22

3.9 Ethical consideration ...................................................................................................... 23

3.10 Limitations of the study ............................................................................................... 23

CHAPTER FOUR ..................................................................................................................... 25

DATA PRESENTATION, ANALYSIS AND DISCUSSION OF THE FINDINGS ... 25

4.0 Introduction ....................................................................................................................... 25

4.1 Social Demographic Characteristics .......................................................................... 25

4.1.1 Age of the respondents ............................................................................................... 25

4.1.2 Marital Status of the respondents .......................................................................... 26

4 .1.3 Sex of the respondents ................................................................................................ 28

4.1.4 Educational status of the respondents ................................................................. 29

4.2 The relationship between taxation and local government performance ........ 3 I

4.3 Impact of taxation on performance of local government in Kin on doni

Municipal Council ................................................................................................................... 32

4.3.1 Education provision ..................................................................................................... 33

4.3.3 Water extension ............................................................................................................ 34

4.3.4 Road construction ........................................................................................................ 35

4.3.5 Infrastructure development ...................................................................................... 35

4.4 The types of taxes levied by the local government ................................................ 36

4.4.1 Sales Related Taxes ..................................................................................................... 37

4.4.2 Property Taxes ............................................................................................................... 38

4.4.3 Income Taxes/ Services levy ..................................................................................... 38

4.4.4 Business Privilege Taxes ............................................................................................ 39

4.4.5 Transportation Taxes .................................................................................................. 39

VII

CHAPTER FIVE ...................................................................................................................... .40

SUMMARY OF THE MAJOR FINDINGS, RECOMMENDATIONS, AND

CONCLUSIONS ......................................................................................................................... 40

5.0 Introduction ...................................................................................................................... .40

5.1 Summary of the study ................................................................................................... .40

5.2 Conclusions ....................................................................................................................... .41

5.4 Recommendations ........................................................................................................... .42

5.4 Areas for further research ............................................................................................ .43

APPENDICES ............................................................................................................................ 47

APPENDIX 1. ............................................................................................................................ .47

Questionnaire ............................................................................................................................ 47

Section A ..................................................................................................................................... 47

Background Information ....................................................................................................... 47

Section B ..................................................................................................................................... 48

Time Framework ...................................................................................................................... 51

Appendix Iii ................................................................................................................................ 52

Research Budget ...................................................................................................................... 52