An investigation of challenges facing local government authorities (LGAS) in revenue collection in Tanzania a case of Ilala municipal council

Most of the Local Government Authorities in Tanzania can only afford to pay for their recurrent expenditures by only 10 percent. The remaining percentage is covered by transfers from central government which sometimes fail to disburse or delay disbursements which led to failure of accomplishing planned activities of provision of social services. Primary and secondary data for the research were collected by using interview and questionnaires technique (both structured and unstructured) and documentary review. A discussion was made with Municipal Council Director, Municipal Council Treasurer, Revenue Accountant, Ward Executive Officer, Mtaa Executive Officers, revenue collectors and revenue agents. Data was analyzed quantitatively by using SPSS version 16.0. The findings of the study revealed that challenges facing LGAs in Revenue collection are reviewing of Laws is taking too long, Tax evasion, expensive Property Valuation costs, Tax Exemptions, lack of funds for establishing new market places and extension of existing ones and infrastructure improvement, poverty and unemployment. In Ilala Municipal Council (IMC) where the research has been conducted, the major own sources of revenue are City Service Levy, property tax, billboard and signs, market fees and others. The research findings noted that councils are not collecting revenues due to them up to their maximum potentiality. For example, service levy and property tax could have changed completely the financial position of Ilala Municipal Council if they were fully exploited.