Political and Institutional Factors Affecting Local Government Revenue Management in Tanzania: Experience from Selected Local Government Councils

This studyexamines political and institutional factors on local government revenue collection in Tanzania. The general objective of this study was to investigate political and institutional factors on local government revenue collection in Tanzania. The study was anchored on the following specific objectives :(a) to examine the political influence in Kinondoni and Morogoro Municipals revenue collection after outsourcing; (b) to investigate the institutional influence in revenue collection by local governments. The study adopted the case study research design and the methods of data collection were interviews, questionnaires and documentary review.The major findings indicate that, despite outsourcing revenue collection in KMC and MMC, an increase in revenue has not been fully realised because of the institutional and political influence on revenue collection. The weak capacity of the councils to enforce the contracts and the companies’ failure to remit revenues to the studied councils caused the dismal revenue collection in KMC and MMC. The study concludes that outsourcing of revenue collection has not substantially increased revenue in KMC and MMC. The study calls for local government officials to comply with the Public Procurement Act No. 7 of 2011, so that tenders for revenue collection are awarded on merit. When these measures are enforced by the councils, outsourcing of revenue collection will increase revenue to the KMC and MMC.