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Maggie Edited
Maggie Edited
Maggie Edited
REVENUE COLLECTION
BY:
TRAINING INSTITUTE
FEBRUARY, 2015
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DECLARATION AND COPYRIGHT
I hereby declare that this project paper titled An Assessment in Revenue Collection is
my own work and has been never submitted in any other collection of higher learning.
Where any part of this work has been obtained from the work of others authors, it has
been duly acknowledged. This work has not in any way been submittedfor any other
Signature…………………………………
MAGRETH H. KIFUMU
Date……………………………………..
Note part of this project paper may be reproduced, stored in any retrieval system or
transmitted in any form and by any means without prior written permission of the author
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ACKNOLEDGEMENT
I would like to offer my heartfelt thanks to God for mercy and grace upon me, since the
day I stated my project, a number of people whose advice and suggestion assisted me
First, I must express my gratitude to all workers at TRA like Mrs.Devotha, Mr.Bad and
Mrs. Joyce Maro are those who cooperate with me to find the research data.
Second, all thanks goes to my beloved family Mr.H. Kifumu my father and Mrs.Evaline
Thirdly, I give thanks to Mr. Maximilian who comes to see my work which I perform
during the project training practical and also other thanks goes to Mr. Baruti my
everyone who in one way or another contributed in my research work, God bless them
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ABSTRACT
This research describes effective and efficiency in collection of revenue. The research
entails to understand the ways used in collection of revenue if are good or bad to the
taxpayers. The research findings revealed that there was a correlation between taxpayers
and the receiver of revenue. Also it has been realized that most of the people were an
aware on how there is the important of paying tax which will improve public finance.
This is due to the fact that, there is no participation or lack of education to the people
Some recommendations have been put forward for the aim of remove the mistakes that
have been done in the most of TRA especially in the field of revenue collection and
public finance. It is recommended that the Municipal need to observe the ideas of
Also the researcher needs to observe adherence with the principles of collecting revenue
and also giving true and accurate reports on the expenditure used. However conclusion
in this study can help to change the operation systems these Local Authorities since
there is no close cooperation between the management and other employees specifically
on the case of transparency and accountability. With this observation there are many
NSSF Member who paying tax in TRA facing the same problems. It is recommended to
visit those NSSF and especially the Authority concerned with the Local Authorities and
to educate the taxpayer on the importance of paying tax. Either the researcher is
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TABLE OF CONTENTS
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3.6 Trend of Revenue Collection................................................................................................12
3.7 Presentation of Findings and Analysis..................................................................................12
3.8 Revenue Collection...............................................................................................................13
3.9 Deliberate Refusal to Pay Tax...............................................................................................15
3.10 Education to Tax Collectors................................................................................................15
CHAPTER FOUR.......................................................................................................................17
CONCLUSION AND RECOMMENDATION..........................................................................17
4.1 Conclusion............................................................................................................................17
4.2 Recommendations.................................................................................................................18
REFERENCES...........................................................................................................................21
APPENDICES............................................................................................................................22
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LIST OF TABLES
Table 1: The budgeted and actual amount of revenue collected from year 2002/2004...13
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LIST OF ABREVIATIONS
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CHAPTER ONE
1.0 Introduction
donation, grants, fees and selling of the government property (s) being the main source
According to the Local government Act of 1982,No 9 which give the local government
authorities the power to maintain peace, order and good governance promoting social
responsibilities the local government authorities need to have revenue through tax
licenses, fees and user charges. In this case, proper Internal Control over revenue
collection is of most importance. The local government authorities have to convince the
public that the revenue collections are utilized properly for purpose intended and in
1.1 Background
Local government authorities were established under the local government act 1982. The
provisions of social services such as school, hospitals, health centers, supplies of clean
water, and other economic services such as constriction and maintenance of roads,
provision of agricultural and livestock facilities within the localities and other necessary
services (Local Government Act 1982). The provisions of these services need adequate
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and sufficient revenue from various sources of the council which are property tax,
business license, service levy, market stall, hotel levy, liquor license fees, buss stand
fees, cesspit emptying, public parking fees, meat inspection and billboard advertisement
and grants from the central government. The fund obtained should be properly utilized
and guidelines which include among others the local government acts 1982, local
assessment team from president’s office which were Mr. Leonard Chacha, Mr. Sekulu
and Mrs. Christina Mndeme, recommended that revenue collections and expenditure
were poorly performed as such proper analytical tools for interpretation of financial
statement are required. (Morogoro municipal council August 2004). This show that the
collections and application of fund for many councils fail to meet targeted goals due to
lack of analytical tools and techniques that reveal the past, current and future financial
performance that could act as a guidance for control of the development projects in the
ratios in order to assist the councils to archive their goals. Revenue collection and
management in most of Tanzania local authorities is poor and normally based on trial
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and error approach in such a way that local government operations have not reached the
targets and failed to meet public expectations as a result the council continue to prepare
the so called deficit budget and hence depend much on the central government.
The significance of the research study will useful in order to assess of effective and
diploma course. That also to increase revenue collection in the region and come up with
(i) To bring social services near to population in order to improve health sanitation and
transportation.
(iii) To manage the available resources in more effective and efficient way.
(iv)To have a sound financial management in order to prevent wastes of resources and
avoid inefficiency
Authorities, and to improve the existing of internal control over revenue collection
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1.2.2 Specific Objectives
2) To reveal any area of weakness and to suggest the appropriate solution and
4) To assess the staff of the revenue and accounting departments at large in their
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CHAPTER TWO
2.0 Methodology
Briefly this chapter is basically intended to provide a description on how data will be
collected at the area of study (Morogoro Municipal Council). Example of the important
issues to be discussed in this chapter includes; study areas, target population, sample
This study will be carried out at Morogoro Municipal council. The Office situated
around CRDB Bank, Region Hospital, also MMC is situated around TRA. MMC has
been chosen because it helps the different people to receive services and other services
Morogoro municipal Council, head of accounts departments, staff and other employees
of accounts department.
This was carried out taking into consideration the number of departments present in the
organization. The researcher divided the population into three strata which include
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Sample size of the departmental leaders included at least one (1) representative from
each department .The staff group had 30 workers. Sample size of the staff includes the
whole workers.
These provide a range of methods that enable the researcher to reduce the amount of
data he needs to collect by considering only data from sub groups rather than all possible
This is non-probability sampling procedure that ensures that the sample represents
certain characteristics of the population chosen by the researcher. The researcher finds
quota sampling necessary because it is appropriate for case study design; it is less costly
and can be obtained easily. Under this technique, the researcher divided the total
population into four groups namely managers, head of accounts departments, staff and
other stakeholders of the organization such as employees. 80% of the sample was
2.5.1 Interviews
This involved presentation of oral verbal stimuli and reply in terms of oral verbal
responses. Interview is important for collection of primary data. It is also found that
managers are more likely to agree to be interviewed rather than complete questionnaires.
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2.5.2 Questionnaires
of forms. The questionnaire sent to the respondents who were expected to read and write
down reply on their own. The researcher used the structured questionnaire during his
case study in which questions were specified and all respondents other than accounting
2.5.3 Observation
people’s behavior. There are some data or activities that are stated in the organization
facilities. They have to be observed. Participant observation will have been used
whereby the researcher observed at the same time attempted to participate fully in the
2.5.4 Documentation
This include written documents of the organization such as notices, journals, books,
magazine, administrative and public records as well as non written documents such as
tape and video recording. The researcher used all written documents such as
administrative records, books and journal which in one way or another helped him to
Data collected had been analyzed using descriptive statistics such as percentages in
order to summarize and organize data in meaningful way. The data were interpreted so
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as to give clear meaning to the reader. The researcher used sample drawn from the
The researcher used both Qualitative and Quantitative technique during the study.
This is a technique that uses non-numerical data or data that have not been quantified.
The researcher used this for non-standardized data based on meanings that need to be
This technique uses numerical data or data that are quantified. The researcher is going to
apply this to analyze and describe numerically the effectiveness of the revenue
collection procedures
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CHAPTER THREE
3.0 Introduction
The analysis of how effective does the revenue collection system at Morogoro is, has
been done by a researcher after establishing the validity of the research questions,
interviewed members of staff from the finance section, personnel and administration
section, not only that but also they have been given a schedule of questionnaire to fill
It has been observed that procedures used to collect revenue from taxpayers are similar
to all revenue departments. Tax payers come by themselves to the offices of the
Morogoro and pay their taxes depending on the nature of activities they are undertaking,
they do make these payments by means of either cash or cheques. Through the study it
has been discovered that other tax payers are not willing to pay even if they are already
in tax brackets, hence there is always physical survey, visit and check-up to taxpayers
areas of business to make sure that they pay their taxes on time and also as a means of
detecting others who are conducting various business activities but still are not in tax
The tax system in Morogoro municipal Council is still characterized by high rates
concentrated over a narrow base in spite of a major tax reform effort. Taxes are levied
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on few activities leaving out many of the activities untaxed. The structure of the
activities has changed considerably, especially in the period of economic reform but the
structure of taxes has not changed significantly. For instance in the interpretation of tax
status what is said is that ‘substance and not form’ is taxed, but in really life what is
discovered is that in most cases this rule operate in vain. This scenario in turn affects the
collection of revenue.
The research reveals that most of taxpayers, that is, taxpaying community is not
educated well on why they should pay taxes, the public is against taxation since they see
no clear relation between the taxes they are paying and the volume and quality of
services they get. In this regard ,what a researcher can generally say is that, the
it has not prepared the tax payers on the aspect of taxation .It is known that most of
Tanzanians are lacking formal business education, this problem led to businessmen to
have poor arrangements of their business, putting no records of their undertaking hence,
becoming very difficult for tax collectors to extract appropriate amount to be paid by
each individual.
Unfortunately, above all the problems to the side of tax payers, the research discovered
that no satisfactory education campaign on tax issues are being conducted by Morogoro
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3.4 Poor Working Environment and Work Load
The researcher also noted that the finance department is facing non conducive working
environment as most of the personnel have to do their work in a very poor condition
even in terms of office furniture, few available rooms, very few accountants have access
to computer and in actual fact the computer are not networked. In general most of the
workers are doing their work manually. The finance department has only one car
reserved for use by City treasurer, this is not enough for revenue collection purposes.
The workload of collecting revenues has been really a burden to finance department in
the sense that the council is expanding much rapid while the tools and instruments of
Again in Morogoro most of individual tax payers are small scale businessmen, normally
peddlers and street vendors, thus it is not easy to trace the amount they are supposed to
pay as tax, it is again very difficult to visit them and collect taxes and if they are left to
ensure efficient and effective collection of revenue and expenditure control, appropriate
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The researcher identified that there are several factors that hinder the revenue collection.
The main problem identified in this area is failure to monitor and control revenues from
their sources. For instance there is no reliable database of tax payers making it difficult
to estimate revenue and hence difficult in follow up. In the case of property taxes there
exists a problem in valuation the council has not yet recently conducted property
valuation. It is from this scenario therefore creating some loop holes to evade property
Revenue collection is very important to any local government authority since the
imposed to unqualified personnel it will be difficult for them to come up with a system
The research found that for quite some number of years the trend of revenue collection
from council’s sources of revenue was below the targeted, this is no doubt because of
the lack of enough skills and knowledge of the people who have been given work to
collect taxes. The fact that in most revenue sources the amount collected is below what
has been forecasted proves that the council has enough revenue sources, what stands as a
Data extracted by the researcher and presented in table below show the budgeted and
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Table 1: The budgeted and actual amount of revenue collected from year 2002 to 2004
The tables above show that the council managed to collect above the target in 2001,
2002 and 2004.In 2002 the council collected exactly what it has budgeted.
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At a glance what can be said is that, the Morogoromunicipal Council has the ability to
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3.9 Deliberate Refusal to Pay Tax
Tax is a compulsory levy that is everyone who meets the criteria of paying tax like
threshold amount that have set, should pay tax. The research found that on the side of
tax payers they have a tendency of refusing to pay tax deliberately and for them this is
heroic conduct.
The researcher discovered that tax collecting officials lack enough education in tax
matters, the revenue collectors need to have enough understanding of the efficiency
collection of revenue so as to be able to educate tax payers, tax payers will get enough
understanding on the important of paying taxes, the type of tax they have to pay etc
obviously they will comply voluntarily hence reducing time and cost collecting revenue.
The revenue collectors should themselves understand the important of being given the
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Table 3: Professional Qualification in Finance Department
PROFESSIONAL NO %
QUALIFICATION
Certificate level 3 10
Advanced diploma/Degree 6 20
Postgraduate 2 6.67
CPA 0 0
TOTAL 30 100
From the table above, it shows that the council is experiencing a shortage of qualified
professionals. No even one certified public accountant in the city council at all, again the
table shows that those who have no any qualification makes a big number in the
department. Only very few percentages of finance department workers have at least
workers have enough skills on taxation and revenue issues. Unfortunately these people
Again those who have at least postgraduate level are below seven percent which is very
dangerous for council which its operation depend much on revenue collection
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CHAPTER FOUR
4.1 Conclusion
municipal for a period of one month. During the field work period in Morogoro
participated fully in all accounting activities. As the major purpose of any report being
collection of findings which could be used in one way or another to solve problems if
any. In this report much of concentration was put on assessing the effectiveness of
revenue collection by looking at its sources, problems faced by the council during
revenue collection exercise and measures that have been and to taken to improve
Despite all these efforts the revenue collection is not sufficiently effective and
efficiency. This is due to many reasons like lack of enough expertise in tax matters, poor
tax administration, tax evasion, lack of enough facilities and poor working condition.
Furthermore the project reveals that methods and techniques used for collection of taxes
discourage taxpayers, for instance fixed rate in some kind of tax like property tax, where
in most cases taxes are charged area-wise regardless of owner’s economic ability to pay
such amount, hence make taxpayers to find by hooks and crooks ways to evade tax
In helping the council to identify some reasons which led to loss of revenue, the research
reveals that the council should increase rate of doing her primary conduct that it has
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4.2 Recommendations
After the study which has been conducted at Morogoro municipal Council for four
weeks and from the findings of the study, and as far as the knowledge of the project is
Education
To revenue officials: Morogoro municipals council should train its staff and provide
them with the technical knowledge and personal skills to perform their jobs
should be if possible all trained on taxation matters. For instance technique of putting
barriers and other kind of harassment in the roads and market places is not a good way
concerning taxpaying.
To Taxpayer: The Morogoro municipal council should educate tax payers on important
of paying tax in order to minimize tax avoidance and evasion. Increase of public
awareness on tax issues is very crucial. The government should prepare the tax payers
and educate them towards compliance, this could best be done by providing proper
education on the important of paying taxes, paying taxes on due dates, effects of not
paying taxes, power that has been given to tax administrators of imposing fines and
penalties and taxpayers rights, this could be best done through seminars, television and
radios programs, news papers and opening of tax consultation centers near public area
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Revenue Source
The Morogoro municipal council has to increase and broaden its revenue sources in the
sense that they contribute much on the total revenue, for instance from the report in
chapter four it seems that produce cess and livestock cess in some years did not
contribute any to revenue. Also the council should make sure that it put special efforts to
Morogoro municipal Council should also establish a separate good and strong revenue
department which will be lead by competent tax administrators and financial managers
of high integrity, honest and accountable to ensure proper enforcement of tax provisions,
Friendship Environment
Friendship environment between tax payers and tax officials should again be observed.
In this aspect what is important is that tax payers should be prepared in such a way that
they treat tax officials not as their enemies rather their friends. Advisory. Morogoro
municipal council should view tax payers as their customers in such a way that it should
be sympathize with those who have faced problems like theft and fire in their business
such that they pay no tax dues at the time of problems, this will improve and strength
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As the work of revenue collection is direct a man to money phenomenon, tax officials
are much tempted to use money they collect, to avoid this revenue/tax collectors should
be provided with good working environments, in terms of salaries and other financial
corruption.
Again good working environment in terms of office facilities like good offices,
computers, introduction of IT such that they become able to accurately keep their
records and provide better services to tax payers and good performance in revenue
collection exercise.
its duties, the staff working with the council especially the finance department should be
well equipped to use modern accounting technology. The employees should be provided
with modern tools and instruments to simplify their work, these tools include computers
if possible each person should be provided his/her own, calculators and other
stationeries.
Councils have been empowered to collect taxes such that they can use them to provide
social services to their areas. Tax payers will automatically comply if first educated on
the potentiality of paying taxes at the same time see the physical improvements like
good social services and infrastructures which result from taxes they are paying.
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REFERENCES
Cap, 332 RE, (2006). The Income Tax Act. Dar es Salaam: The Government
Printer.
www.google.com
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APPENDICES
Dear respondent
Attached herewith is the set of questions which kindly request for your response. I
would like to take this opportunity to present my humble appreciation to you to extend
your support in answering these questions to the best level of your knowledge.
QUESTIONS
2. For how long have you working with finance dept in Morogoro municipal council
…………………………………………………
3. Are you satisfied with the current environment you are working? In terms of
4. Why do you think most people are not willing to pay their tax due voluntarily?
i. Poverty ………..
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If none of the above, what are the reasons?
……………………………………………………………………………………………
……………………………………………………………………………………………
6. Are the facilities available enough for effective performance of the revenue
collection?
i. Efficient ……….
……………………………………………………………………………………………
……………………………………………………………………………………………
9. Are there any seminars or short courses conducted by Morogoro municipal council to
her workers on tax matter?
YES………… NO ……….
10. What measures do you think should be taken in order to improve tax/revenue
collection end administration machinery?
……………………………………………………………………………………………
……………………………………………………………………………………………
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11. Does the system of internal control of revenue influence revenue collection?
……………………………………………………………………………………………
……………………………………………………………………………………………
……………………………………………………………………………………………
……………………………………………………………………………………………
……………………………………………………………………………………………
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