An Assessment Of Factors Influencing Revenue Collection In Local Government Authorities In Tanzania: The Case Of Mbeya City Council

ABSTRACT

The study aimed at assessing factors that influence revenue collection in local government authorities. The study was conducted in 7 wards of Mbeya City namely; Ruanda, Iyunga, Ilomba, Forest, Igawilo, Sisimba and Nsalaga. The research used a case study approach and collected data using interviews, questionnaire, documentarysources and FGD. Participants involved in the study were the principal income earners in the households. The data collected were analyzed qualitatively and quantitatively. The findings show that Mbeya City Council has the following revenue sources: property tax, bus stand and parking fees, billboards and advertisements, service levy, sale of plots, market dues and, toilet fee. The findings also show that from year 2005/2006 up to 2010/2011 the trend of revenue collection was good. With regard to factors that influence revenue collection, findings show that it was influenced by affordability of tax/fee rates and satisfaction with service delivery.Other factors that influenced revenue collection were tax education to tax/fee payers, willingness to pay, availability of database for tax/fee payers, economic activities carried out within an area of jurisdiction. With regard to challenges that face revenue collection findings show that they were revenue not spent on public services, corruption, multiplicity of taxes/fees, harassment by tax/fee collectors, limited tax education and dishonest tax/fees collection officials. The study recommends that Mbeya City Council leaders deal with the challenges to improve revenue collection.