Revenue collection and service delivery: The case of Bukoba Municipal Council

Abstract

The main objective of the study was to determine the relationship between revenue collection and quality of service delivery in Bukoba Municipal council. Specifically the study aimed to: explore the nature and types of internal source of the revenue collection, examine the quality of services delivered by the council in relation to the actual revenue collected and assess the factors determining revenue collection in the council. Within a case study design, explanatory and cross- sectional design was used to collect information from 100 targeted sample sizes. Eleven sources of internal revenue were identified; Property tax, service levy and Licence were budgeted to collect the larger portion of total budgeted internal revenue in the council. The study revealed ineffective revenue collection of the council internal revenue sources that are more than 28% equivalent to 622,161,498 of the budgeted revenue for financial year ended June 2014 was uncollected. The study surveyed four sectors (Health, Trade, Livestock and Agriculture). Development expenditure allocated and incurred was used to measure the quality of service delivery .Under collection of internal revenue was reported to lower the quality of services delivered by the council in all four service sectors surveyed. The study indicated that the higher the revenue collected the higher the development expenditure hence improved service delivery. The respondents pointed out that; corruption, poor financial accountability, limited sources of internal Revenue, Inadequate tax knowledge, Deficit budget, Political interference, inadequate application of cannons of good tax and management instability as the factor which determine revenue collection in the council. The study exposed positive relationship between actual revenue collected and services delivery which was determined by Pearson Correlation. The study recommended establishment of taxpayer database to enhance efficiency and timely revision of local tax by-laws and compliance promotion strategy through awareness raising local Tax