Abstract:
Government Electronic Payment Gateway (GePG) has been proven by numerous studies to
have a potential influence on internal government revenue collection. However, existing
studies did not investigate in detail the effectiveness of government electronic payment
gateways in internal revenue collection by local government authorities, as a large proportion
of LGAs are facing a problem of low revenue collections and funds to meet social services'
rising needs. This study assessed the effectiveness of the GePG system on LGA's internal
revenue collection in Tanzania. Secondary data for a period of 42 months was used,
consisting of 21 months before GePG and 21 months after GePG, and a quantitative
approach was used. A multiple linear regression model was employed with regression results
of 86.01% R square (R2) before GePG and 84.40% R square (R2) on the model after the
GePG implementation. At the 5% level of significance, the model before GePG was
introduced was positive-related, with a P-value of less than 5% level of significance for tour
operator fees, business licences, bus stand charges, fines and penalties, and hotel levy and
insignificance on service levy, while after GePG implementation, the P-value was less than
5% level of significance for tour operator fees, business licences, bus stand charges, fines and
penalties, and hotel levy and insignificance on service levy, but improved compared with
before. It is concluded that the introduction of GePG is useful for effective LGA internal
collection. Therefore, the study recommended that the government should increase the tour
operator fee, service levy, business licensee, bus stand charges, fines and penalties, and
hotel levy to enhance revenue under LGAs.
