Revenue Collection Practices and Performance of Local Government Authorities in Tanzania

Abstract

This study evaluated the impact of revenue collection practices on the performance of Local Government Authorities (LGAs) in Tanzania, focusing on Arusha City Council (ACC). Specifically, the study examined the efficiency of the revenue administration system, the level of transparency and accountability, and the capacity building of revenue officials in enhancing LGA performance. The study was underpinned by a positivist philosophy and employed a quantitative research approach to gather and analyze data. A descriptive research design was used to collect primary data through structured questionnaires and semi-structured interviews with 65 respondents, sampled using stratified random sampling from a population of 78 ACC employees. Secondary data sources, including annual reports and revenue records, were also reviewed to triangulate findings. Data were analyzed using descriptive statistics, correlation, and regression analysis with STATA version 18. The findings revealed a significant relationship between the revenue administration system, transparency and accountability, and capacity building, and the performance of LGAs. The regression model confirmed that improvements in these practices positively influenced performance, with the efficiency of the revenue administration system having the strongest impact. The study highlighted the importance of adopting robust revenue collection systems, enhancing transparency and accountability, and investing in continuous capacity building for revenue officials. Ethical considerations were adhered to, including obtaining informed consent, maintaining confidentiality, and protecting data. The findings further underscored the need for LGAs to address systemic challenges in revenue collection, including inadequate training for revenue officials and limited oversight mechanisms. By implementing targeted interventions, such as advanced digital systems and capacity development programs, LGAs can enhance revenue efficiency and service delivery. This research contributes to the broader discourse on improving fiscal sustainability and operational effectiveness in local governance, providing a model that can be replicated in similar urban councils across Tanzania and beyond.