Assessment of the effectiveness of outsourced revenue collection in Tanzania local Government authorities : the case of Tanga city council

The main objective of this study was to assess the effectiveness of outsourced revenue collection in Tanzania Local government Authorities: the case of Tanga City Council. Specific objectives of the study were: to assess the effectiveness of outsourced revenue collection in Tanga City Council, to pinpoint the challenges facing Tanga City Council in managing private revenue collectors and to compare effectiveness of in-house revenue collection and outsourced revenue collection in Tanga City Council. Data was collected from 120 respondents who were selected using stratified and simple random sampling. The researcher used both primary and secondary data. Methods of data collection were questionnaire and documentary records. Primary data were obtained from questionnaire while secondary data were from documentary records. Analysis of data was performed using linear regression and descriptive technique and presented in form of cross tabulation frequencies and percentages. The findings of the study show that outsourcing has led to some improvement in revenue collection although there are also some disadvantages of its application including non-contractual compliance to some revenue agents and lack of assessment of the actual revenue potential for various tax bases which has resulted to failure to attain best performance. Tanga City Council demonstrates major flaws in the administration of its own revenue which is another area of consideration. Conclusively, when outsourcing is done appropriately it can yield positive results in revenue collection.