The Effectiveness of Digital Technology on Revenue Collection in Local Government Authorities in Tanzania

Abstract

Despite the long-standing existence and use of digital technologies to improve revenue collection in Tanzania, it has failed to meet the expectations of some Local Government Authorities (LGAs) in Tanzania, as they have reported undercollection of revenues. This has been attributed to various challenges that hamper effective revenue collection in LGAs, including poor infrastructure, a lack of strong and stable networks in some areas, and some operators' incompetence, leading to undercollection of revenues and the wastage of time. The primary objective of this study was to comprehensively assess the effectiveness of digital technology in revenue collection within Local Government Authorities in Tanzania, with a specific focus on Ifakara Town Council. Employing a case study approach and adopting a qualitative research and case study design, the study engaged 30 participants, including leaders, heads of departments, and management personnel within Ifakara Town Council, chosen through purposive sampling for their valuable insights and experiences related to revenue collection processes. Data collection was facilitated through interviews, allowing for an in-depth exploration of the subject matter. The qualitative data gathered were subsequently analyzed using content and narrative analysis techniques. The findings revealed that the integration of digital technology significantly improved efficiency, transparency, and accountability in revenue collection. However, challenges such as a lack of reliable internet connectivity, insufficient training for staff, and recurring technical glitches were identified as impediments. Based on these findings, recommendations include strategic investments in digital infrastructure, comprehensive training programs for staff, and the establishment of a clear regulatory framework for digital payments in local government authorities. These insights contribute to a nuanced understanding of the impact of digital technology on revenue collection in Ifakara Town Council and offer valuable recommendations for enhancing its effectiveness in similar contexts.