In recent years many Government Authorities have reformed their tax collection systems in order to increase revenue and minimize the operating costs that was associated in revenue collection.Being the case,most of the Local Government Authorities have decided to outsource the revenue collection activities to other organisations.Outsourcing is the art of assigning certain functions of a company to another external company or agency in bid to enhance quality of services,minimize costs and bring frexibilities to the operations.Mbarali District Council is among those organisations which decided to outsource the revenue collection activities.The reason behind was the large amount which was spent in generating those revenues. This study therefore aimed at determining the performance of outsourcing revenue collection in Local Government Authority taking Mbarali District Council as a case whereby specifically the study aimed at determining the determinant factors for outsourcing of revenue collections, assessing constraints experienced in the revenue collection practices and determining improvement measures for revenue collection through outsourcing. Design a research venture involved of data, organizing and analyzing data to achieve the research objectives and purpose whereby 80 respondents were involved in the study. Data were analysed using Statistical Package for Social Science (SPSS) and excel computer programmes and results were presented in tables, charts and histograms. According to the study findings, it was revealed that, the major factors for determining outsourcing to be the district ability to outsource considering the constraints to the outsourcing which include according to the findings; workload to the district activities. There was found also measure for the revenue collection through outsourcing to be in place. In that respect it was concluded that the district should strive on outsourcing in order to improve district development and that all constraints should be worked on with collaboration between the government and other stakeholders.Also the private collectors should abide to contract signed which includes submission of revenue on time, returning the used books on time and follow up the procedure during the process of collection.

A Dissertation Submitted in Partial Fulfillment of the Requirements for Award of the Degree of Master of Science in Accounting and Finance (MSc A&F) of Mzumbe University.