Factors Affecting Revenue Collection in Local Government Authorities Tanzania: A Case of Moshi District Council

Abstract

In many countries. Local governments seem to raise whatever taxes. fees and charges they ate capable of raising. Often without worrying excessively about the economic distortions and distribution effects that these instruments may create. Local government continues to have limited autonomy over own sources of revenue. The revenue collection hag been fluctuating, but the reasons are not proved by empirical evidence. main objective of this study was to assess factors affecting revenue collection in Local Government Authorities citing the case of Moshi District Council, Tanzania. The study is based on Economic deterrence models. Case study design was used in this study. Data were collected from 80 respondents from various levels of revenue collection. The findings revealed that the Moshi District council revenue came from five sources that include agriculture products, coffee crop cess, service levy, small market at village level called "magulio fees" and business license. The findings also show that higher percent in revenue came from agricultural and forestry products. The findings show that revenue collection is done by many, but most of revenues are collected by District Council officials and small percent of revenue is collected by outsourced agents. Tax payer's perception on revenue collection findings indicated that the willingness of tax payers in paying tax was at low extent. The findings also showed that area of priority revenue use were not the area of interest to tax payers. Improved revenue collection is possible through improved technology and education and training as well as sensitization to tax payer. The study recommends that the council should develop adequate plans for revenue collection which cover sources of revenue. The council should revise the existing by-laws ang effect amendments to reflect the current development especially, revenue collection reforms measures.