Factors Affecting Revenue Collection in Local Government Authorities in Tanzania.

Abstract

This study investigated the factors influencing revenue collection in local government authorities in Tanzania, specifically at Dar es Salaam City Council. It aimed to explore the effects of taxpayer perceptions, financing systems, and internal control systems on revenue collection efficiency. The research employed a descriptive design with a quantitative approach, utilizing questionnaires and documentary reviews for data collection. A sample size of 103 was used, but only 78 respondents were able to return their questionnaires, and data were analyzed using descriptive and inferential statistical methods. Regarding the first objective, the study found a positive relationship between taxpayer perceptions and revenue collection in local government authorities, with a significant P-value of 0.012 (P < 0.05). This suggests that favorable perceptions among taxpayers contribute to enhanced revenue collection practices. In relation to the second objective, the research revealed a strong and positive correlation between the internal control system and revenue collection, supported by a statistically significant P-value of 0.012 (P < 0.05). Effective internal control mechanisms were shown to positively influence revenue outcomes. Furthermore, the study identified that financing systems significantly influence revenue collection in local government authorities, with a notable positive impact indicated by a P-value of 0.026 (P < 0.05). The significance of well-organized financial methods in maximizing revenue collection endeavors is emphasized by this. Conclusively, taxpayer perceptions, internal control systems, and financing mechanisms were identified as crucial determinants of revenue collection efficiency t Dar es Salaam City Council. The study recommends that the central government, through the PMO-RALG, should review and update the local tax framework to empower Tanzanian local councils to effectively generate local revenues. Future research should focus on understanding these factors across diverse contexts to inform more comprehensive policy interventions.