FACTORS AFFECTING REVENUE COLLECTION IN TANZANIA

REVENUE AUTHORITY
FACTORS AFFECTING REVENUE COLLECTION IN TANZANIA
REVENUE AUTHORITY

A CASE OF TRA DAR ES SALAAM, ILALA REGION.

 CERTIFICATION
I, the undersigned to certify I have read and here by recommend for acceptance by the
Mzumbe campus college university, Tanzania the dissertation entitled “Factors
affecting revenue collection in Tanzania revenue authority, a case of Tanzania revenue
authority at Dar es salaam Ilala Region Mapato House’’ In partial fulfillment of the
requirements for the award of Bachelor Degree of Accounting and Finance in Business
sector.

Signature:
_______________________
Date:
_______________________

i
 DECLARATION
I, Godfrey M Filbert, declare that A Research report entitled “Factors affecting revenue
collection in Tanzania revenue authority, a case of Tanzania revenue authority Dar es
salaam llala region at Mapato House flow no 4” is my original work and has not been
submitted and will not be presented. to any college, institution or university other than
the Mzumbe Mbeya campus college university(MCC).

Signature
___________________
Date
_____________________

ii
 ACKNOWLEDGEMENT
I convey special gratitude to my supervisor Mr. Mpemba for his cooperation, advice,
assistance, encouragement and constructive criticism throughout the study, may
Godless you.
The heartfelt thanks go also to my family members especially my brother and my
brother-in-law for their prayers.
Special thanks to Regional Accountant Mr. Denis musing for support, and constructive
advice through this study. Without his assistance and encouragement, I do not think that
I would have come this far.
Many thanks should go to Tanzania revenue authority staff (whom I contacted) for their
support during data collection. Also to my classmates whom from time to time were
helpful in whatever case.
But above all to Almighty God for His overwhelming grace and mercy which have seen
me through this program; every step of the way.

iii
 DEDICATION
This work is lovingly dedicated to Mr. & Mrs. Emmanuel Kabeya Bona for their
support and Encouragements.

iv
 LIST OF ABBREVIATION
TRA - Tanzania revenue authority

CAG - Controller and Auditor General

IPSAs - International Public Sector Accounting Standards

IFRS - International financial reporting standard.

LTD - Large Taxpayer Department

DRD - Domestic Revenue Department

CED - Customs and Excise Department

VAT - Value Added Tax

NTR - Non-Tax revenue

ICT - Information and communication technology

IPSAs - International Public Sector Accounting Standards

ANOVA - Analysis of Variances

URT - United Republic of Tanzania

v
 ABSTRACT
The purpose of this study was to examine the factors that affected, both positively and
negatively, revenue collection in Tanzania Revenue Authority (TRA) in Dar es Salaam
llala region. More specifically, it examined the effects of the Political Situation on
Revenue Collection, the effects of Policies on revenue collection, impact of support
system, adequate information, accountability and transparence and internal control
system on revenue collection. A descriptive research design was adopted as it addressed
the research questions through empirical assessment involving numerical measurement
and statistical analysis. Simple random sampling technique was used to select a sample
of 102 respondents. Data analysis was done using statistical package for social
scientists (SPSS). First, data was collected, cleaned, sorted and collated. Descriptive
statistics and measures of association were used to examine the relationship between
the independent and dependent variables. This was followed by analysis using
inferential statistics such as Pearson correlation to examine the relationship between
revenue collection and political stability. The analytical results showed that the impact
of political situation affected business operations, security of the people, as well
availability and distribution of resources and as a result, tax collection and
administration of tax laws. It also revealed that the policies in place at a specific point
in time did affect the revenue collection for the jurisdiction. But also analytical result
showed that the impact of accountability and transparency on revenue collection, that
revenue collection reduced or increased due to accountable of TRA staffs and also
information obtained in organization may affected in the organization of revenue
collection. And internal control system affected revenue collection due to human errors,
frauds, and lack of information technology from that point revenue collection were
affected due to internal control system. The study concluded that; although a stable
political environment enhanced revenue collection, closeness to general elections posed
hindrances to collection of revenue in Dar es Salaam ilala Region at Mapato House.

vi
 TABLE OF CONTENTS
CERTIFICATION ........................................................................................................... i

DECLARATION ............................................................................................................. ii

ACKNOWLEDGEMENT ............................................................................................. iii

DEDICATION ................................................................................................................ iv

LIST OF ABBREVIATION ........................................................................................... v

ABSTRACT .................................................................................................................... vi

TABLE OF CONTENTS .............................................................................................. vii

LIST OF TABLES ........................................................................................................ xiii

LIST OF FIGURES...................................................................................................... xiv

CHAPTER ONE .............................................................................................................. 1

1.0 Introduction .............................................................................................................. 1

1.1 Background to the research problem ........................................................................ 1

1.2 Statement of the Problem ........................................................................................ 2

1.3 Objective of the study............................................................................................... 3

1.3.1 General objective ............................................................................................... 3

1.3.2 Specific Objectives ............................................................................................ 3

1.4 Research Questions................................................................................................... 3

1.5 Significant of the study............................................................................................. 3

1.5.1 Tanzania Revenue Authority ............................................................................. 4

vii
 1.5.2 The Government ................................................................................................ 4

1.5.3 The General Public (Taxpayers) ........................................................................ 4

1.5.4 Scholars and Academicians ............................................................................... 4

1.6 Limitation of the Study............................................................................................. 4

1.7 Scope of the study .................................................................................................... 5

CHAPTER TWO ............................................................................................................. 6

LITERATURE REVIEW ............................................................................................... 6

2.0 Introduction .............................................................................................................. 6

2.1 Theory Guiding the Study ........................................................................................ 6

2.1.1 Agency Theory................................................................................................... 7

2.1.2 Contingency Theory .......................................................................................... 8

2.3 Political Instability and Revenue Collection............................................................. 8

2.3.1 Instability as a result of socio-political unrest ................................................... 8

2.3.2 The second dimension involves certain events.................................................. 9

2.4 Effect of political instability on revenue collection ................................................. 9

2.4.1 Internal conflicts ................................................................................................ 9

2.4.2 Reduction of tax revenue ................................................................................... 9

2.4.3 Lack of concentration among the managements and employees in the

organization ................................................................................................................ 9

2.4.4 Corruption and frauds ........................................................................................ 9

2.5 Effect of tax policies on Revenue Collection ......................................................... 10

2.5.1 Tax policy objective......................................................................................... 10

2.6 Impact of Support Systems on Revenue Collection................................................ 15

viii
 2.6.1 Information Technology .................................................................................. 16

2.6.2 Human Resources ............................................................................................ 17

2.6.5 Government staffs ............................................................................................ 18

2.7 The impact of level of performance on revenue collection .................................... 18

2.7.1 Enhances efficiency of collection revenue ...................................................... 18

2.7.2 Enhance inefficiency of revenue collection ..................................................... 19

2.8 The effect of internal control system on revenue collection .................................. 19

2.8.1 lead efficiency of revenue collection ............................................................... 19

2.8.2 lead inefficiency of revenue collection ............................................................ 19

2.9 The effect of Accountability and transparence on revenue collection ................... 20

2.9.1 lead efficiency of revenue collection ............................................................... 20

2.9.2 lead inefficiency of revenue collection ............................................................ 20

2.10 The impact of adequate of information on revenue collection ............................. 20

2.10.1 lead efficiency of revenue collection ............................................................. 20

2.10.2 But also lack of adequate information may lead inefficiency of collection
revenue especially in Tanzania revenue authority .................................................... 21

2.11 Empirical literature ............................................................................................... 21

2.13 Conceptual Framework ........................................................................................ 22

2.13.1 Political stability ............................................................................................ 24

2.13.2 Human Resources .......................................................................................... 24

2.13.3 Support systems ............................................................................................. 25

2.14 Level of performance ........................................................................................... 25

2.15 Accountability and transparency .......................................................................... 26

ix
 2.16 Adequate of information....................................................................................... 27

2.17 Definition of Terms .............................................................................................. 27

2.17.1 Tax Burden..................................................................................................... 27

2.17.2 Tax Base......................................................................................................... 28

2.17.3 Tax Rate ......................................................................................................... 28

2.17.4 Collection Efficiency ..................................................................................... 28

2.17.5 Target Deficit ................................................................................................. 28

CHAPTER THREE ...................................................................................................... 29

RESEARCH METHODOLOGY ................................................................................. 29

3.0 Introduction ............................................................................................................ 29

3.1 Research Design ..................................................................................................... 29

3.2 The Area of the Study............................................................................................. 30

3.3 Population of the study ........................................................................................... 30

3.4 Sampling techniques and sample size .................................................................... 30

3.4.1 Sampling procedures........................................................................................ 30

3.4.2 Sample size ...................................................................................................... 31

3.5 Data Collection Methods ........................................................................................ 32

3.5.1 Primary data methods ...................................................................................... 32

3.5.2 Secondary data ................................................................................................. 33

3.6 Data Analysis Methods........................................................................................... 35

CHAPTER FOUR ......................................................................................................... 36

DATA ANALYSIS, INTERPRETATION AND DISCUSSION ............................... 36

x
 4.0 Introduction ............................................................................................................ 36

4.1 Demographic Information of respondents .............................................................. 36

4.1.1 Gender of Respondents .................................................................................... 36

4.1.2 Age of Respond................................................................................................ 37

4.1.3 Education level of respondents ........................................................................ 37

4.2 Analysis of Finding ................................................................................................ 38

4.2.1 Effect of Political Stability on Revenue Collection ......................................... 39

4.2.2 Effect of Tax Policies on Revenue Collection ................................................. 40

4.2.3 Effects of Support Systems on Revenue Collection ........................................ 40

4.2.4 The impact of adequate information in revenue collection ............................. 41

4.2.5 Impact of accountability and transparency with staffs .................................... 42

4.3 Discussion of Findings ........................................................................................... 43

CHAPTER FIVE ........................................................................................................... 45

SUMMARY, CONCLUSION AND RECOMMENDATIONS ................................. 45

5.0 Introduction ............................................................................................................ 45

5.1 Summary of Findings ............................................................................................. 45

5.1.1 Political Stability.............................................................................................. 45

5.1.2 Policies ............................................................................................................. 45

5.1.3 Support Systems on Revenue Collection ......................................................... 46

5.1.4 Level of performance ....................................................................................... 46

5.1.5 Internal control system..................................................................................... 47

5.1.6 Adequate information ...................................................................................... 47

5.1.7 Accountability and transparency ..................................................................... 47

xi
 5.2 Conclusion .............................................................................................................. 48

5.3 Recommendations .................................................................................................. 49

5.3.1 Recommendations for Action .......................................................................... 49

5.3.2 Recommendations for Future Research ........................................................... 49

REFERENCES .............................................................................................................. 51

APPENDICES ............................................................................................................... 54

xii
 LIST OF TABLES
Table 3.1 Sample selection .............................................................................................. 32

Table 4.1 Age of Respondents ......................................................................................... 37

Table 4.2 Effect of Political Stability on Revenue Collection ......................................... 39

Table 4.3 Effect of Tax Policies on Revenue Collection ................................................. 40

Table 4.4 Effects of Support Systems on Revenue Collection ........................................ 41

Table 4.5 The impact of adequate information in revenue collection .............................. 42

Table 4.6 Impact of accountability and transparency with staffs..................................... 43

xiii
 LIST OF FIGURES
figure 4.1 Conceptual framework/model ......................................................................... 23

Figure 4.2 Education level of respondents ....................................................................... 38

xiv
 CHAPTER ONE

1.0 Introduction
The research aimed to assess factors affecting revenue collection by the Tanzania
Revenue Authority in Ilala region. This chapter consist of background to the research
problem, statement of the problem, research objectives, research questions, hypothesis,
and significant of the study, scope of the study, limitation of the study, definition of the
key terms as well as organization of the study. but also The ever rising economic and
financial needs of Tanzania and the budget constraints that constantly exist threaten the
sustainability and growth of the Tanzania economy. The purpose of this study is to
examine the factors that affected. both positively and negatively, Revenue collection by
Tanzania revenue authority, more especially it examined the effect of the incumbent
policymakers and the effects of the TRA support system on revenue collection.

1.1 Background to the research problem

Taxes have existed since the period when civilization began. An American statesman
Franklin Carter (1706-1790) wrote that, there was nothing in the world that was certain
except death and taxes. Tax is a compulsory financial charge or some other type of levy
imposed on a tax payer (an individuals or legal entity) by a governmental organization
in other to fund government spending and various public expenditures taxes consist of
indirect taxes and may be in money or as is labor equivalent. Adams (2006) noted that,
it was the lack of consent to taxation that led to the war in Holland in the 16th century
and the American War of Independence. Different countries impose different rates of
tax on their peoples’ incomes, goods and services. Adams (2006) observed that, sooner
or later, in one way or another, taxes affect us all, young or old, be it as employers, or
businessmen building the nation, or as faithful employees, or consumers of goods and
services, there is a tax obligation for every person, legal or natural. Since the 1980s, a
large number of developing countries have been in the process of making reforms
in their financial sectors and government sectors (Das, 2011).

1
1.2 Statement of the Problem
Compliance comes as a result of the probability of audit, coupled with the probability
of accruing penalties from underpayment of taxes (Aizenman and Jinjarak, 2005). As a
result, taxpayers only honor their obligations because there are repercussions to
noncompliance. The level of efficiency in revenue collection is affected by various
factors, which include: - taxpayer ignorance, lack of sufficient workforce to enhance
compliance of the entire taxable population, communication barriers/language problem
and low levels of information penetration, high levels of illiteracy among other causes.
These hindrances to revenue collection result in: - indebtedness of taxpayers, high
costs of collection which include taxpayer education, at times high risks for the tax
collecting officers, deficits in meeting of targets from treasury, which in the long run
leads to unavailability of funds to pay the country’s debts or to finance the national
budget (Waweru, 2005). Over the past eight years, there have been surveys and
reports carried out in Tanzania for the purpose of exposing weaknesses in service
delivery as well as enhancement of revenue collection due to the need to increase
revenue raised (Cheeseman and Griffiths,2005). The National Business Agenda
released by members of the private sector pointed out that despite improved services,
taxpayers still face difficulties from the complexities of ever-changing processes and
statutory procedures as well as the forms and paperwork that are required to be filled in
for service requests. As a result, the Taxpayer Program was developed so as to improve
service delivery and enhance service options to taxpayers, deliver focused education
outreach and alternate services as well as enhance information penetration levels and
ensure strict adherence to the provisions of the Taxpayer Charter; and revamp the
customer care desks as well as the call center program (Tanzania Revenue Authority,
2000). These initiatives have improved service delivery a great deal; however, there
still exists factors that hinder effective collection of revenue for TRA (Fjeldstad and
Rakner, 2003).
There exist valuable empirical literatures that study the revenue collection strategies.
These include Awitta (2010) and (Gachanja, 2012); however, not much literature

2
investigates actual factors that affect tax revenue collection in Tanzania Ngowi et al
(2009). This study therefore seeks to fill the literature gap in the country specific
study by exploring the factors that hamper revenue collection and possible solutions to
these factors, as well as those that boost collection of revenue in Dar es Salaam.

1.3 Objective of the study

1.3.1 General objective

Generally, the study sought to evaluate the factors that affected Revenue Collection
the Tanzania Revenue Authority especially in llala region.

1.3.2 Specific Objectives

i. To determine how political instability affects revenue
collection.
ii. To find out how tax policies affect revenue collection.
iii. To determine the impact of the support systems, have on revenue collection.

1.4 Research Questions

The study aimed to answer the following research
questions:
i. How does political instability affect revenue collection?
ii. How do policies such as tax burden on domestic profit affect revenue collection?
iii. What impact does the support systems like online resource, volunteer have on
revenue collection?

1.5 Significant of the study

Due to taxation is the major source of government revenue and government collect
revenue to fund a different activity. Therefore, this research of factor affecting revenue
collection may be
Benefit in different parties such as,

3
1.5.1 Tanzania Revenue Authority
The research findings would enhance the Authority’s collection levels as a result of
policies put in place by the government as well as helping in meeting of revenue
targets for the purpose of funding the government expenditure. Also, may increase
efficiency and sufficiency of internal control system within the organization.

1.5.2 The Government

The research findings would give to the government to adequate more information and
accountability and transparency for the staffs due to increasing level of performance and
network system.

1.5.3 The General Public (Taxpayers)

This research would help to improve literacy in matters regarding taxes and tax
obligations and increase information penetration to the tax payers. It would also lead to
a reduction in the effect of penalties imposed on them, and as a result, create a tax
compliance culture.

1.5.4 Scholars and Academicians

This research will extend the existing knowledge on the means of revenue collection as
well as the factors that promote or hinder efficient revenue collection.

1.6 Limitation of the Study

The study encountered some limitations such as lack of co-operation among the
members of the Tanzania revenue authority to disclose some information pertaining to
the research as they in one way or another injured their interest. Another constraint was
time as the time given was hardly four months which affected the accomplishment of
the research with regard to the field data collection. Moreover, due to the fact that data
on the study were anticipated to be collected from different sources and places,
financial constraint to effect travel in different places led to inadequate data to meet the

4
objective of the study. Also were very difficulties to complete information on research
when conducting research due to problems of language between researcher and staffs or
other people relating in research. So, in order to complete information during the
research preparation should simple language used between researcher and staffs or
other in order to boost researcher to write research in a good report research.

1.7 Scope of the study

Scope of the study was cover difference parties like purpose of the studies which based
on factors which affect revenue collection in TRA, the factors as follows level of
performance, Tax policy, political stabilities, internal control system, accountability and
transparency, adequate of information , population size which based on 104 people
employees at Tanzania revenue authority Ilala Region Mapato House found at station
street and deals with differences activities such as assessment of revenue, internal
control system, issued of Motor vehicle stickers, stamps, license, issued of local
purchases order (LPO), bank reconciliation statement, suspense’s account.

5
 CHAPTER TWO

LITERATURE REVIEW

2.0 Introduction
This chapter discussed the literature on the factors that affect the collection of tax
revenue collection. A literature review “. creates a firm foundation for advancing
knowledge. A successful literature review facilitates theory development, closes areas
where a plethora of research exists, and uncovers areas where research is needed"
(Webster & Watson, 2002 p8). Fink (2014 p3) describes literature review as a
"systematic, explicit and reproducible method for identifying, evaluating and
synthesizing the existing body of completed and recorded work produced by
researchers, scholars and practitioners”. The literature under review for this study seeks
to narrow down on seven factors that contributed to efficiency of revenue collection in
Tanzania. These are: the political environment, the tax policies in place and the
support systems of the revenue collecting agency, level of performance, internal
control system, accountability and transparency and adequate of information. This
section presents a review of all the literature under study relating to the research
problem itself and the purpose of the study. It delved into the details of how each of
these factors contributed - either positively or otherwise, to the efficiency of revenue
collection in Tanzania. It will organize according to the factors mentioned and a
summary concluded the chapter.

2.1 Theory Guiding the Study

There is no direct theory since now which have been formulated regarding internal
control of the firm in relation to revenue collection. Theories have been formulated on
internal audit and financial performance. They include Agency theory and Contingency
theory. Since internal audit have direct relationship with internal control, it is better to
discuss these theories too. These theories are discussed below.

6
2.1.1 Agency Theory
Agency theory is concerned with resolving problems that can exist in agency
relationships; i.e. between principals such as shareholders and agents of the
principals for instance, company executives. The two problems that agency theory
addresses are: the problems that arise when the desires or goals of the principal
and agent are in conflict, and the principal is unable to verify what the agent is
actually doing and the problems that arise when the principal and agent have different
attitudes towards risk. Because of different risk tolerances, the principal and agent may
each be inclined to take different actions. Adams (2012) in his article stated that agency
theory can provide for richer and more meaningful research in the internal audit
discipline. Agency theory contends that internal auditing, in common with other
intervention mechanisms like financial reporting and external audit, helps to maintain
cost-efficient contracting between Principles and staffs and. Agency theory may not
only help to explain the existence of internal controls and internal audit in firms but
can also help explain some of the characteristics of the internal audit department, for
example, its size, and the scope of its activities, such as financial versus operational
auditing. Agency theory can be employed to test empirically whether cross-sectional
variations between internal auditing and internal controls practices reflect the different
contracting relationships originating from differences in organizational form. In case of
this study, this theory is related due to fact that Tanzania Revenue Authority act as
principal and staff of TRA act as agents who collect revenues on behalf of their
principal. It may arise conflicts when staff collect revenues and took them to
themselves without bringing it to their principal if effective internal control systems are
not designed. Responsibilities which include financial reporting, budgeting and
providing any other additional information to the principal. The contingency theory on
the other hand explains that organizations' behavior and functions are dependent on
factors such as technology, culture and the external environment that the organizations
operate in.

7
2.1.2 Contingency Theory
Contingency theory is an approach to the study of organization behavior in which
explanations are given as to how contingent factors such as technology, culture, and the
external environment influence the design and function of organization. The assumption
underlying contingency theory is that no single type of organizational structure is
equally applicable to all organization. rather than organizational effectiveness is
dependent on a fit or match between the type of technology, environment volatility, the
size of the organization, the feature of the organizational structure and its information
system. Contingency theory is used to describe the relationship between the context and
structure of internal control effectiveness and organizational performance, especially
reliability of financial reporting. Empirical study suggests that internal environment,
technology, structure, and size, strategy and national culture. It suggests that the
demands imposed by the technical tasks in the organization encourage the development
of strategic to coordinate and control internal activities. The dimensions of structure and
control include authority structure and activity’s structure, example relus and
procedures that determine the option of individual, contingency theory states that the
design and use of control system is contingent upon the context of the organization
setting in which these controls” (Jensen 1998).

This theory has direct relationship with the study since management control is
contingent on a variety of internal and external factors. Therefore, researcher assessed
factors such as

2.3 Political Instability and Revenue Collection

Political instability may be categorized broadly into two
dimensions; these are:

2.3.1 Instability as a result of socio-political unrest

such as political assassinations, riots and revolutions and mass violence. These forms
of insecurity are associated with conflicts between ideologies or due to religious or

8
ethnic differences.

2.3.2 The second dimension involves certain events

For Example, termination of government, electoral hitches and inadequacies (Mutascu,
Estrada and Tiwari, 2011). Both of these dimensions’ result in uncertainty about the
future course of the tax rates, provision/availability of goods and services, exchange
rates policies, inflation policies,

2.4 Effect of political instability on revenue collection

2.4.1 Internal conflicts

Within the organization such as Tanzania revenue authority, internal conflict was
caused by management and their employees because there was no political instability
between both.

2.4.2 Reduction of tax revenue

In Tanzania revenue authority, political instability led collection revenue to be reduced
due to no stability of collecting revenue. Few officers of revenue collection may be
discouraged because of political instabilities.

2.4.3 Lack of concentration among the managements and employees in the

organization
Sometime political instability may be led lack of concentration among the members of
the organization, at Tanzania revenue authority there was few members who said that
when the organization enter in political instability automatically concentration of
members may be reduced quickly.

2.4.4 Corruption and frauds

political instability within the organization such as Tanzania revenue authority few
respondents said that political instability discourages people to work hard, therefore led

9
some officers to enter into corruption and frauds or misuses of resource such as
revenue.

2.5 Effect of tax policies on Revenue Collection

During the colonial, the British implemented an indirect system of rule, whereby,
they deviously used taxation to exploit and suppress the indigenous people and ensure
that they were impoverished and did not grow out of their poverty (Afolabi,
2010). Oliver Wendell, an American statesman stated that tax was the price that people
had to pay in order to have a civilized society. Cobham (2005) defined tax policies as
the administrative tools used by government and its agencies to impose govern and
collect taxes in a democratic society. He observed that for policy to be formulated,
the policy makers first had to set out the purpose of taxation policy, that is, to clearly
identify what the policy is supposed to accomplish and then draft the means of
implementation of the said policy. He pointed out the goals of the policies to be:

2.5.1 Tax policy objective

The main purpose of tax policy is to fund common welfare, various public
services and other public expenditure.

2.5.1.1 Revenue
This according to Cobham (2005) is the main and most direct purpose of taxation. The
need for revenue is to cater to:
Urgent needs: these include crises solving and meeting of immediate problems, for
example wars, drought, famine and floods as well as poverty and emergency medical
treatment;
Short-term needs: these include immediate needs that are not quite crises, but are
needs which may result in a crisis if they are not efficiently and effectively addressed,
for example, poverty eradication, provision of education and preventative medicine and
healthcare;
Long-term needs: these include the need to improve the people’s quality of life,

10
improve public amenities and infrastructure as well as to create suitable investment
environments.
2.5.1.2 Redistribution

Cobham (2005) defined this as the need to achieve human development gain for the
society by removing members from the state of poverty that is as a result of inequality in
distribution of resources. The government works towards achieving wealth distribution
by charging higher rates of tax on those who are economically able as well as businesses
have high levels of economic and political stability; this implies that favorable tax laws
enhance stability of the government. Ghura and Mercereau (2004) analyzed the
relationship between trade and taxation, and political climate. They found that
turbulence in the level of trade and low levels of taxation bring about political
instability. This implies that, political instability was caused by, among other things,
shortages in revenue from taxation. 2.4.3 Re-pricing economic alternatives: Cobham
(2005) noted that re-pricing of economic alternatives arose when government used
policy to influence its citizen’s behavior, for example, by creating incentives to save
or by increasing the cost of dumping so as to protect the environment and thus, curb the
vice. After the goal of the policy has been identified, the policymakers can then go
ahead and make appropriate policies to fulfill the intended goal. This results in credible
policies that enhance collection for the intended purpose. Waris (2007) observed that, tax
laws and policies are as a result of the capabilities of a nation and its constitution and
legislative provisions. She was of the opinion that tax laws operate in a system of trial
and error. This implies that, there is no ‘one size fits all’ when it comes to formulation
of tax policies, policymakers have to tailor-make their policies to fit their constitutional
needs and economic trends, as well as to match the legislative structure and governance
of the society; and that there is no way of finding out how effective a policy will be
before it is implemented. Wares (2007) also noted that tax reforms in Tanzania were
moving towards new legislation, rather than increasing or reducing the tax rate imposed.
For instance, there are considerations of widening the tax base to include the informal
sector, that is, the ‘juakali’ and second-hand clothes Industry. Although this would be

11
hard to accomplish, it would drastically increase the amounts of tax revenue collected on
behalf of the government (Waweru, 2005). Waris (2007) also pointed out that tax laws
and policies source their authority from the constitution of the land they govern; and
that the policies are not static, rather, they change depending on the goals of the
government in power at the time and its priorities and intentions.

2.5.1.3 Economy
Collection costs by the government and compliance costs by the taxpayer should be by
the taxpayer should be minimized; minimizing compliance costs leaves more time and
money for the taxpayer.

2.5.1.4 Ability to pay

The taxpayer should pay an amount based on his ability to pay, which depends on his
income.

2.5.1.5 certainty
A describe tax structure should be predictable and consistent, meaning that the taxpayer
should know when and where and how the tax will be levird, so that individuals and
businesses, and other organization can readily ascertain the tax consequences of any
endeavor or transaction.

2.5.1.6 Accounting practices

All receipts and receivables should be recorded in accordance with generally accepted
accounting principles (GAAP). Through that revenue collection can be proper collected

2.5.1.7 Billing and collection practices

Accounts receivable should be established for services provided in advance of payment
and terms for collection should be established. In accordance with established
procedures, bills should be initiated, recorded in an accounts receivable system, and

12
generated within an established timely manner after initial service delivery. Through that
revenue collection can be proper collected.

2.5.1.8 Methods of payment

A policy outlining the acceptable methods of payment for the governments should be
established. This policy should include the method of access (as well as method of
payment) while promoting electronic methods of access and payment when feasible and
cost-effective to reduce overall risk and increase cash flow, through that revenue
collection will be proper collected

2.5.1.9 Depositing of received funds

Treasury management should serve as the primary recipient for all revenue collection
sites. There should be timely recognition and depositing of revenue collected. Smaller
governments that do not have a formal treasury function are encouraged to establish a
formal single

2.5.1.10 Due to the special nature of funds received from grants, developers,
partners and other entities
Governments should consider whether separate procedures should be established for
recording and depositing these funds.

2.5.1.11 Returned checks

Procedures for processing and collection of returned checks should be established,
including the assessment of fees to offset the costs associated with the returned items.

2.5.1.12 Accounts receivable management

All accounts receivable should be recorded in a manner that allows for aging analysis.
After reviewing available collection options, governments should establish procedures
that maximize collections. Collection agencies that are familiar with federal, state, and

13
local notice requirements and regulations should be considered when their use proves
cost-effective.

2.5.1.13 Bad Debts

An allowance for doubtful accounts and a write-off policy should be established. Bad
debt expense should be estimated based upon a documented method of calculation. An
allowance for doubtful accounts should be recorded. Write-offs should be performed
periodically to ensure that accounts receivable and allowance balances are not
overstated. Efforts should be made to pursue the timely collection of delinquent
accounts.

2.5.1.14 Budgetary review responsibilities

Revenue collections and accounts receivable should be monitored in a timely manner.
Both actual and budgeted or forecast revenues should be monitored. Any significant
variance of actual from the forecast or budgeted revenues should be investigated
thoroughly.

2.5.1.15 Compliance
Governments should ensure their revenue control and management policy and
procedures are in full compliance with any federal, state, local or other applicable laws
or requirements.

2.5.1.16 Support system

Support System is a mechanism that helps people collect, store, organize, and use
information. According to Duff et al (1980), support System is a collection of people,
procedures, a base of data and (sometimes) hardware and software that collects,
processes, stores and communicates data for transaction processing at operational level
and information to support Managerial decision making. The basic purpose of any
system is to help its users get a certain type of value from the information in the system,

14
regardless of the type of information that is stored. Support system was essential to
increase transparency and accountability of government agencies, reduce transaction
costs in service delivery and enhance participation of citizens, businesses and civil
society in the workings of governments. Better accountability and improved
transparency were the identified characteristics of good governance at that point revenue
collection can be collected proper and Tanzania revenue authority may enjoy to enhance
revenue collection.

2.6 Impact of Support Systems on Revenue Collection

A support system is defined as a series of independent elements which work together
interdependently to facilitate the seamless functioning of a whole system (Fjeldstad
and Rakner, 2003). The revenue collecting agent in Tanzania, TRA had since 2004
been undergoing the Revenue Administration Reforms and Modernization Programme
(RARMP). This programme was introduced for the purpose of dealing with the
challenges that inhibited achievement of full integration, and a modern and seamless
tax administration. Its aims were to have the reforms deeply entrenched in the
operations of TRA in-order to achieve operational efficiencies and enhance service
delivery at the lowest possible cost. The programme was broken down into several
projects that mainly comprised the main departments and support system of TRA. These
projects are:
(i) Customs reforms and Modernization Project
(ii) Domestic Taxes Reforms and Modernization Project
(iii) Road Transport Reform and Modernization Project
(iv) Business Automation Project
(v) Human Resources and Revitalization Project
(vi) Infrastructure Development Project

Support systems include the people, that is, the human resources involved, as well as
stakeholders who include the government, investors, the board of directors, creditors
Among others who have vested interests in the organization and other system such as,

15
2.6.1 Information Technology
Information technology offers opportunities for any organization to substantially
amplify its productivity and effectiveness while cutting costs of production and
enhancing efficiency, effectiveness and accountability in the processes. However, this
may be hindered by users’ unwillingness to embrace change and to utilize the available
systems, as well as insufficient training of the users, as well as shortage of funds
available to conduct user training on new and current systems (Davis, 1989).With the
world evolving into a global village and everything being ‘technologified’, it is
important to accept change and adapt to the technological changes taking place in-order
to enhance efficiency in revenue collection (Miyahira, 2008). He also noted that, new
technologies have brought about new tools to help businesses work more efficiently,
this in turn translates into higher taxes from the businesses. The revenue collecting
agency therefore has to keep up with the technological advancements in-order to
exploit the new avenues created in enhancing revenue collection. Miyahira (2008)
pointed out that the massive numbers of taxpayers bring about complexities in efficient
collection of revenue; however, many different information technology systems have
been put in place for the purpose of assisting in the tax collectors to carry out their
duties.
Within each of the six projects started up as part of implementation of the RARMP,
Information Technology has been a big part of the reforms implemented. This has been
in the form of: establishment of an online portal as a means of enabling taxpayers to
access TRA online services; integration of TRA business systems into a single view for
taxpayers across all functions; implementation of IT best practice and ensuring
compliance with ISO complaint quality management system (Tanzania Revenue
Authority, 2000). This has brought about higher levels of compliance due to: easier
access to documentation and taxpayers’ records; empowerment of taxpayer through
introduction of do-it-yourself processes, this ensures that the taxpayer can keep track
of their records and transactions

16
2.6.2 Human Resources
Huselid (1995) was for the argument that the use of high performance work
practices that include proper and comprehensive employee selection and recruitment
procedures, feasible and incentive compensation, performance monitoring and
management systems, and extensive employee involvement in decision making and
training can improve the knowledge, skills and abilities of a firm’s current and potential
workforce, increase their motivation and reduce employee turnover while enhancing
retention of quality workforce. Cutcher-Gershenfeld (1991) found that the firms that
employed ‘transformational’ labor relations, that is, those that emphasized cooperation
and dispute resolution mechanisms had lower costs and higher productivity than
those that did not. According to the (Turkish Revenue Administration), among the
most important factors to improving revenue collection is the level of quality of the
service offered by the tax collecting agency. That is, there is need to have Total
Quality Management training in order to develop a comprehensive, innovative,
effective and high-quality taxpayer service system.
Factors that were highlighted in this were:
(i) Training of all personnel in the organization, and especially those involved in
service delivery on teamwork, problem solving techniques, leadership and motivation;
(ii) Creating a standardized measure and evaluation system for employee satisfaction;
(iii) Enhancement of employee growth by motivating them to further their studies;
(iv) Promotion of gender equality within the organization and having equal
opportunities for growth and progression for both genders as well as the minority
groups, for example, persons with disabilities. Cheese man and Griffiths (2005) pointed
out that the TRA Corporate plan 2003/2004, 2005/2006, used the Balanced Score
Card (BSC) as a performance measurement strategy along four dimensions.

These are:
(i) Financial, that is, to surpass revenue targets;
(ii) Internal processes, that is, to increase efficiency of the processes and reduce cost;

17
(ii) Stakeholders, that is, to ensure high quality service to taxpayers, government and
all other related parties; and
(iv) People, that is, to develop a highly motivated and professional work force. The
Taxpayer program was also developed so as to improve service options to deliver
focused education outreach and alternate services as well as enhance information
penetration and ensure strict adherence to the provision of the Taxpayer Charter and
revamp the customer care desks and call center programs (Tanzania Revenue
Authority,2000). Having a productive and motivated workforce would play a
significant role in enhancement of revenue collection (Waweru, 2005).

2.6.5 Government staffs

At this part largest user of information technology government exist to serve their
citizens. Their primary activity is record keeping. The public administration processes
various data and information processing. Government authorities collect and process
various data and information on family individuals and organization. In general
government is the single largest user of information technology in many coutries.in
many developing countries the government is a predominant consumer of information
technology product. Many of the international technology use are well know taxation,
custom, and financial management.

2.7 The impact of level of performance on revenue collection

2.7.1 Enhances efficiency of collection revenue

In the collection of revenue for the Tanzania revenue authority there are differences
staffs whose engage in collection of tax revenue. therefore, if the performance of staffs
is very high in collecting revenue, then automatically the revenue collection will be
higher due to speedup made by staffs.so that in order to enhance revenue collection in
the organization such as Tanzania revenue authority should be staffs and other members
such as interns to be protected like allowances, motivation in order to increase the level
of performance of the organization.

18
2.7.2 Enhance inefficiency of revenue collection
It means that sometimes the level of performance with the staffs may lead the collection
of revenue to be inefficiency due to lack of performances of the staffs and other
member relating with Tanzania revenue authority for example to perform their duties
out of the normal working hours without any allowances. But also, the staffs to attend
with the job to rate may also lead inefficiency of the collection revenue.

2.8 The effect of internal control system on revenue collection

2.8.1 lead efficiency of revenue collection

The organization such as Tanzania revenue authority use internal control system to
perform difference activities for example in issuing payment voucher, control number
for payment activities, register for payment, bank reconciliation statement adjustment of
bank of Tanzania, preparation of weekly report and monthly report, to check whether
payment made by clients are proper entered in the commercial banks of Tanzania
revenue authority for the organization need a control system but also issue of
assessment, value added tax, and other need internal control system therefore when the
internal control system is work proper automatically will hence efficiency of revenue
collection in the organization.

2.8.2 lead inefficiency of revenue collection

Sometimes the organization activities may not be performed well due to poor internal
control system within the organization. For example, lack of awareness, human errors
internet system
And staffs to be uneducated about internal control system all are the causes which may
lead internal control system to be poor when operating organization duties. For this
examples lead internal control system to be poor and automatically lead inefficiency of

19
revenue collection.

2.9 The effect of Accountability and transparence on revenue collection

2.9.1 lead efficiency of revenue collection

The efficiency of revenue collection may be encouraged by accountability and
transparences of the staffs. If the organization have segregation of duties to their staffs
and staffs perform the duties according to levels and responsibility will lead efficiency
but also staffs to be honestly and to protect a good communication to clients and others
automatically will lead efficiency of revenue collection in the organization especially in
Tanzania revenue authority

2.9.2 lead inefficiency of revenue collection

Sometime if the staffs of the organization are unable to be accountable and transparency
in segregation of duties within the organization the revenue collection will be lower
than what Tanzania revenue authority expected to return from the annual budgeted. And
also lead annual target for the organization to be lower due to poor accountability and
transparences from the staffs and others who relating Tanzania revenue authority.

2.10 The impact of adequate of information on revenue collection

2.10.1 lead efficiency of revenue collection

Efficiency of revenue collection may be increasing due to full or complete information
from the clients. In order to increase the revenue collection clients should provide
complete information and accurate information with the staffs or Tanzania revenue
authority for example during the assessment of sale some clients provide wrong
information in order to avoid charged high tax. Therefore, information should be
complete, accurate. Adequate and understandable for those who are responsible at that
time if clients and Tra staffs both provide accurate information and complete
information automatically efficiency of revenue collection will be greater.

20
2.10.2 But also lack of adequate information may lead inefficiency of collection
revenue especially in Tanzania revenue authority
As we know that collection of tax revenue is a major source of Tanzania revenue
authority, so luck of information from the clients during the assessments of sales lead
inefficiency of revenue collection but also fail to pat tax on time may led revenue
collection to be inefficiency. But also delaying of submission information from one
place to another also may lead inefficiency of revenue collection.

2.11 Empirical literature

a reported in such a manner that other investigates understand precisely what was done
and what was found in a particular research study to the extent that they could replicate
the study to determine whether the finding is reproduced when repeated. According to
research report of factors affecting revenue collection at TRA. And observed that there
is an increasing amount of evidence from experimental studies and survey data that
show that people trust in others and by his or her perceptions of the trustworthiness of
the lead to equal tax assessment. Therefore, from this perspective people are likely to
fluid the government only when they believe that it will act on their interest, its
procedures are fair and reasonable, and their trust in the state and other people is
reciprocated. Fjeldstad (226) argues that people willingness to pay taxes voluntary rests
on the government capacity to provide good and services and its demonstrated redness
to secure compliance otherwise lead to non compliant. Following the above observation,
it is seen that in defining voluntary tax payment compliance, a number of variables are
taken into consideration. For example, the internal revenue services of the Tanzania
revenue authority. There exist valuable empirical literatures that study revenue
collection strategies. These include Awitta (2010) and (Gachanja,2012), however, not
much literature investigates actual factors that tax revenue collection in Tanzania Ngowi
et al (2009). This study therefore seeks to fill the literature gap in the country specify
study by exploring the factors that hamper revenue collection and possible solutions to
these factors as well as those that boost collection of revenue in dare s salaam. But also,
according to respondents who participating in providing information most of them told
21
that transparency and accountability is one of the factors that may led whether revenue
collection to increase or to decrease in the Tanzania revenue authority, for example
motivation of staffs, extra duties, and allowances with the staffs led TRA staffs to
perform in high quality as well as performance.

2.12 Research gap

Despite the fact that many researchers who conducted different studies on factors
affecting Revenue Collection as stipulated in literature review above presents various
factors leading to performance of revenue collection, these studies have left other
important factors for achieving more revenue such as Political stability, good
policies, level of performance, accountability and transparences, adequate of
information and support systems. Therefore, under this study apart from factors
discussed by other scholars, some other factors which might affect revenue collection
and those that explain revenue collection situation in TRA will be evaluated.

2.13 Conceptual Framework

In any research work, there may be two variables, which will be used for testing
hypotheses, one variable, which is known as independent variables and another
variable, which is dependent variable. A dependent variable is what you measure in the
experiment and what is affected during the experiment (Liu 2012). The dependent
variable responds to the independent variable. It is called dependent because it
"depends" on the independent variable. Independent Variable is the variable that
is stable and unaffected by the other variables you are trying to measure. It refers to the
condition of an experiment that is systematically manipulated by the investigator
(Trochim 2006). These variables are expressed in conceptual framework section of the
study. Conceptual framework is a group of concepts that are broadly defined and
systematically organized to provide a focus, a rationale, and a tool for the integration
and interpretation of information, usually expressed abstractly through word models
Kothari (2004). Conceptual framework of this study also explains relationship between

22
independent variables and dependent variable. Independent variables in this study are
factor affecting which are political stability, policies, support systems, level of
performance, accountability and transparences and adequate of information. Dependent
variable of this study is effectiveness of Revenue Collection.

Figure 2.1 Conceptual framework/model

DEPENDENT VARIABLES INDEPENDENT

VARIABLES

Factors affecting revenue collection

POLITICAL STABILITY

TAX POLICIES

SUPPORT SYSTEM
EFFICICIENCY

LEVEL OF PERFOMANCE OF
REVENUE
COLLECTION

INTERNAL CONTROL
SYSTEM

ACCOUNTABILITY
&
TRANSPARENCY
2.13 Operational Frame Work

23
2.13.1 Political stability
Political stability means government stability, which means political stability. People
will know the terms and conditions of the state. They will get the firm place to stand and
act according to the law and order (Friedmann 1977).and obligations; reductions of
corruption as digital records are quite hard to alter or eliminate; reduction of errors in
data inputted, as the systems detects some forms of errors wile inputting data. A
computerized tax system may also reduce the operational costs of revenue collections
and as a result, a reduction in expenditures, a probable residual budget may be invested
in means to enhance the citizens’ welfare prioritizing the society’s needs (Miyahira,
2008). Waweru (2005), the former Commissioner General of TRA noted that, the use
of information technology in support of tax administration had boosted the tax
administration in countries as diverse and multi- cultural as Spain, Mexico, Canada,
Singapore and New Zealand. He pointed out that there was a need to use technology to
support tax administration and although it is an expensive venture, it would enable the
government to address the problems of transfer pricing, taxation of e-commerce and tax
evasion by some tax planning techniques. It was his vision and dream to have a TRA
that was completely computerized

2.13.2 Human Resources

Huselid (1995) was for the argument that the use of high performance work
practices that include proper and comprehensive employee selection and recruitment
procedures, feasible and incentive compensation, performance monitoring and
management systems, and extensive employee involvement in decision making and
training can improve the knowledge, skills and abilities of a firm’s current and potential
workforce, increase their motivation and reduce employee turnover while enhancing
retention of quality workforce. Cutcher-Gershenfeld (1991) found that the firms that
employed ‘transformational’ labor relations, that is, those that emphasized cooperation
and dispute resolution mechanisms had lower costs and higher productivity than
those that did not. According to the (Turkish Revenue Administration), among the

24
most important factors to improving revenue collection is the level of quality of the
service offered by the tax collecting agency.

2.13.3 Support systems

2.13.3.1 Human resource

Tracey (2013) defines Human Resources as The people that staff and operate an
organization, as contrasted with the financial and material resources of an
organization. A Human Resource is a single person or employee within organization.
Human Resources is also the organizational function that deals with the people
and issues related to people such as compensation, hiring, performance management,
and training.

2.13.3.2 Information Technology

Information technology (IT) is the use of any computers, storage, networking and other
physical devices, infrastructure and processes to create, process, store, secure and
exchange all forms of electronic data. The technological innovation has been an
important matter in revenue collection. The advent of new instruments to help
businesses work more efficiently affects the way revenues are collected (Fjeldstad2004).

2.13.3.3 Revenue collection

Hongreen (2002) described revenue collection as inflows of asset (almost always cash
or accounts receivables) received for products or services provided to customers.
Revenue is the amount of money that a company actually receives during a specific.

2.14 Level of performance

The level of performance provides to analyze the determinants influencing revenue
collection on the performance of Tanzania Revenue Authority. The study specifically

25
aimed to; determine the effect of organization resources; find out the effect of revenue
collection; assess the effect of Information Communication Technology adoption and
establish the effect of tax regulatory framework on revenue collection performance at
TRA. The study adopted a descriptive research design and the target population
comprised of a total of 102 staff working at the Tanzania Revenue Authority Mapato
House in llala region Dar es salaam. The study adopted a probability sampling design by
using a stratified random sampling technique to select a sample size of 83 respondents.
The main data collection instruments were the questionnaires containing both open
ended and close ended questions with the quantitative section of the instrument utilizing
both a nominal. A pilot study was carried out to test the reliability and validity of the
questionnaires. Descriptive statistics data analysis method was applied analyze data
aided by Statistical Package for Social Sciences (SPSS) to compute responses
frequencies, percentage mean and standard deviation results. Finally, Multiple Linear
Regression model was employed to establish the significance of the independent
variables on the dependent variable. The findings were presented using diagram.
Findings from the study showed that organization resources, revenue collection, ICT
adoption and tax regulatory framework were the key determinants influencing revenue
collection performance at Tanzania Revenue Authority. The study concluded that that
ICT adoption, followed by tax regulatory framework, then organization resources and
lastly corporate governance practices determines revenue collection performance. The
study recommendations were that; allocation of more human and financial resources in
order to strengthen the organization capacity in revenue collection; appointment of board
members who are competent and have capability in directing, controlling organization
operations; effective implementation and use of automated revenue collection systems
and improve on the level of tax regulations enforcement.

2.15 Accountability and transparency

Accountability signifies the concern and duty of workers or staffs to perform their
activities in the best interests of the public and that Tanzania revenue authority should

26
take responsibility for their activities performed and from that point revenue collection
can be more efficiency. The mechanisms by which Tanzania revenue authority officials
can be held responsible for activities against formed principles and rules is called legal
accountability.

Transparency is a situation in which Tanzania revenue authority activities and other

supporting organizational activities are performed in open way without any secrets held
behind, so that the public can believe and trust that these organizations are honest and
fair. In other words, it’s a concept of eradicating all barriers and enabling information
access to public and facilitates procedures, rules and regulations that protects those
citizens, and this reflects on the development of the nation. Therefore, through that the
revenue collection can be improved in a systematic way.

2.16 Adequate of information

Availability of information in the organization activities especially in Tanzania revenue
authority is very important in enhancing revenue collection for example during the
assessment of the clients, if the clients provide complete information and accurate
information to staffs automatically revenue collection will increase more duty to collect
information. But also within the organization from top level management up to middle
level of managements when there is god connection between levels the organization may
increase revenue collection due to adequate of information from one step to another
staffs or any person who relating in Tanzania revenue authority activities.

2.17 Definition of Terms

2.17.1 Tax Burden

This is the amount of tax levied on an individual or business. It may vary depending
on income level, current tax rates and the jurisdiction (Fullerton & Rogers, 1993). It is
the effect of a particular tax on the distribution of economic wealth.

27
2.17.2 Tax Base
This is amount of economic wealth that is liable to taxation (Talvi and Vegh, 2005). It
is the total value of financial assets and incomes on which taxes can be imposed. This
also varies depending on the current tax rate as well as the jurisdiction; in some
countries some categories of income are not liable to tax while in others, they are
(Aizenman & Jonjarak, 2009).

2.17.3 Tax Rate

This is the percentage of the tax base to be charged. That is, the total amount to be
collected from for example a purchase. It is the percent of assets, incomes, goods or
services that is payable as tax (Fullerton and Rogers, 1993).

2.17.4 Collection Efficiency

This is the ratio of collected revenues to collection costs (Aizenman & Jinjarak, 2005).
It measures the effectiveness of revenue collection efforts.

2.17.5 Target Deficit

This is the tax amount by which the actual amount is less than the required/expected
amount (Aizenman and Jinjarak, 2005). It is an excess of expenditure over revenue
available at a certain period (Awitta, 2010).

28
 CHAPTER THREE
RESEARCH METHODOLOGY

3.0 Introduction
This study aims at establishing the extent to which revenue collection reacts to
changes in the political environment, laws and regulations in the land, and changes in
internal controls such as support systems and information technology. This chapter
specifically presents the methodology that was used to conduct this study. It covers the
research design, area of the study, sapling, population of the study, units of
inquiry/analysis, sampling size, sampling techniques or procedures, data collection
methods/instruments, primary data collection method, secondary data collection
method, data analysis methods.

3.1 Research Design

A research design is the arrangement of conditions for collection and analysis of data
in a manner that aims to combine relevance to the research purpose with economy in
procedure. In fact, the research design is the conceptual structure within which
research is conducted; it constitutes the collection, measurement and analysis of data.
As such the design includes an outline of what the researcher will do from writing the
hypothesis and its operational implications to the final analysis of data
(Kothari,2004). Different researchers have classified Research design using different
criteria. Among those is a topical scope criterion in which classification base on scope
of the study (breadth and depth). Basing on the criterion, research designs can be
classified into three types, which include case study design, survey design and
experimental design. In this study, the case study design was used because of its
flexibility for data collection, appropriateness and is efficient for more information
collected from difference sources such as staffs.

29
3.2 The Area of the Study
The Researcher selects Tanzania Revenue Authority in Dar es salaam llala region
b e c a u s e there are many source of revenue located in this area. With the objectives of
the study in mind, selecting this area afforded the researcher the opportunity to contact
TRA officials who have made evaluation on numerous challenges they face and
therefore have a lot of experience to share. The reason for choosing Tanzania revenue
authority is it is a regulatory agency that collect licenses revenues and most of
employees there are directly or indirectly involved in decision making and controls,
therefore researcher was in position of assessing factors affecting revenue collection by
the Tanzania Revenue Authority in Dar es salaam llala Region.

3.3 Population of the study

According to conceptual framework in this study, this study is intended to address the
population of revenue collectors and administrators in Tanzania revenue authority which
available in Dar es salaam region. Therefore, it was necessary to set the limit from which
a sample of the study would be drawn. The population consisted of all officials who are
responsible for administration and collection revenue process of Tanzania revenue
authority. Therefore, the population comprise of officials of headquarters concerned.
The target group comprised, Accountants, Enforcement officers, ICT Officers, Upanga
tax center officers, Normal flow officers, Non tax revenue officers, internal audit
officers, tax property officers and Legal Counsel Officers.

3.4 Sampling techniques and sample size

3.4.1 Sampling procedures

The simple random sampling method was used to select those respondents. Names of
Revenue Collectors, ICT Officers, Accountants, internal audit officers, Tax upanga
officers, legal counsel officers, Enforcement officers, Upanga tax center officers and,
Normal flow officers and were numbered and randomly the names of 104 participants
were obtained. This method was used because the sample chosen constitute a

30
homogeneous group as stated above. The minimum sample of 79 people was selected
from the population which was assumed to respond for questionnaires lectors.

3.4.2 Sample size

For the purpose of this study the sample size of 79 people was considered to be
reasonable and affordable out of 104 peoples. A complete and update list of revenue
collectors and Department officials of each part was provided and used to select the
most appropriate respondents for the study.
For example, of sample size
For this study, a sample (n) of 83 was selected. This was arrived at by use of the
Slovin’s Formula:

n = N / (1 + Ne^2)
Where by:
n=Number of samples
N = Total population (104)
e = Error tolerance (0.05)
Thus:
n= 104
1 + (104*(0.05) ^2)
n = 82.53 or 83
n=83
Profiling was then conducted for the purpose of spreading this number across the
various sectors within the four districts. This sample was seen as an adequate and
sufficient representative of the population of 104 large taxpayers.

31
Table 3.1 Sample selection

Type of respondents Target population Optimal sample size

Legal counsel officers 2 2

Accountants officers 6 6

Upanga tax center officers 16 16

Enforcement officers 18 15

ICT officers 5 2

Normal flow officers 15 8

Non tax revenue officers 16 12

Internal audit officers 13 10

Tax property officers 13 8

Internal audit officers 13 10

3.5
TaxData Collection
property officers Methods
13 8
This section describes the types of data that collected in the field which was both
Legal counsel officers 2 2
qualitative data and quantitative data. Data Collection were collected both in primary
and secondary data; in collecting
TOTAL 104 primary data the researcher
76 used numerous tools for
primary data collection such as interview, questionnaire and observation also survey.
Secondary data were collected through documentary review, internal auditor report and
external auditor report, Electronic Data, Tanzania revenue authority records, Internet in
today’s world is the fastest growing source of information.

3.5.1 Primary data methods

Is a type of data that is collected by researchers directly from main source through
interview, observation, and questionnaire?

3.5.1.1 Interview
An interview is basically an interaction, where questions are posed or a discussion takes
place, between two or more people with a specific purpose in mind. A researcher

32
employed Interview as the research tool in the field with a view of collecting
information. The researcher opted to use a combination of both structured and
unstructured interview.
The use of interview made the respondents feel free with the issues being discussed and
that the flexibility of this tool helped the researcher in getting in-depth information on
the problem of the study in the sense that it was done face to face, hence, it allowed an
interviewee to seek clarification on the kind of questions that the researcher asked.

3.5.1.2 Observation
The researcher also used observation in collecting primary data. Observation helped the
researcher to discover issues that could not come out from interviews and those that
were concealed, either knowingly or unknowingly by the respondents. Observation
involved close follow-up, observing events in the field and synchronizing them within
the context of the theme of the study and at last draw a conclusion.

3.5.1.3 Questionnaire
A questionnaire is a written list of questions prepared in a series form by the researcher
on a given legal problem that are sent to respondents. The researcher made use of this
method in primary data collection in the field through commencing the process of
discovery from the perspective of the respondent. This method was chosen due to the
fact that questionnaires when carefully crafted and administered, they are very useful
tool for getting data from specific groups or people or entire populations on the
identified legal problem. Questionnaires were both close-ended and open-ended, this
tool were useful in time and financial management as well as enhanced the researcher
in getting the relevant answers in accordance to the nature of the problem of the study.

3.5.2 Secondary data

Is the data that has already been collected through primary sources and made readily
available for researchers to use for their own research? A researcher may have collected
the data for a particular project, and then made it available to be used by another

33
researcher. A researcher sometimes was collect data or information through secondary
data in order to get enough evidence for report research. In secondary data information
was collected through;

3.5.2.1 Documentary Review

In gathering information, relevant documents were examined and consulted to
supplement the primary data. The documents reviewed included the ones available at
Llala Municipal Council at Dar-es-salaam and Mzumbe University (Mbeya Campus
College) library concerning the research topic which is about solid waste management
in urban areas: an examination of the law and practice.

3.5.2.2 Electronic Data like

Documentaries and television programs can also be used for recording data in secondary
research. In the Tanzania revenue authority can be a good source of information.

3.5.2.3 Tanzania revenue authority records

Was available in the form of surveys, tax records, census data and other statistical
reports. They are easily available and widely used in research studies.

3.5.2.4 Internet in today’s world is the fastest growing source of information

The internet has become mature and today you can get any information from the
internet. Most of the books was available on the internet in e-book format. You can get
information while staying at home. The information can be obtained faster than you can
obtain from any other source.

34
3.6 Data Analysis Methods
Data analysis refers to the process of rearranging and reducing data so that it can be
easily utilized (Kabiru & Njenga, 2009). The data collected through questionnaire,
documentary review survey and observations was examined and analyzed and put it in
writing. The quantitative data from questionnaires was collected and processed and
analyzed using Statistical Package for Social Sciences (SPSS). Qualitative data from
interviews was sorted to obtain major themes that answer research questions in order
to come up with concrete findings and suggestions computer program called package
for social scientists was used to analyze the data.

35
 CHAPTER FOUR
DATA ANALYSIS, INTERPRETATION AND DISCUSSION

4.0 Introduction
This chapter presents findings, discusses and analyses the information collected from
TRA in Dar es Salaam Ilala region. It tries to scrutinize the data into a critical analysis in
order to obtain information that could provide the answers to the questions under study
on the factors which hinders the performance revenue collections in Tanzania. The
analysis is directed at answering the main research question with the aid of answering
the eight specific research questions as showed above which are, how does political
instability affect revenue collection? How do policies affect revenue collection? what
impact do the support systems have on revenue collection? Why the level of
performance from staffs affects revenue collection in TRA, how internal control system
affects revenue collection, How the accountability and transparency for the staffs affect
revenue collection to find out on how network system affect revenue collection and How
adequate information can be obtained.

4.1 Demographic Information of respondents

Basic demographical information, gender, age of respondents, level of education,
marital status and length of business operation were among data collected under the
topic of personal information during the questionnaire survey. The rationale behind this
was to show the distribution of the respondents and helps the reader to understand how
relevant information is collected from the sample in presenting the target population.

4.1.1 Gender of Respondents

This section presents the personal information of respondents. Figure 4.1 presents the
gender of respondents. It shows that of the 79 respondents, who participated in the
study, 51 warmth percent was (65%) and 25 were female that percent was (35%). It
implies that males have more information about factors affecting revenue collection.

36
4.1.2 Age of Respond
The study was interested in getting different opinions and views from respondents of
different age groups as shown in figure 4.2 below,
Table 4.1 Age of Respondents

Age of respondent
35
30
25
20
15
10
5
0
20-25 26-30 31-40 41 and above

The results in Figure 4.2 showed that, the age distribution of the respondents which
was number between 20 and 25 years was 15%, and number between 26 and 30 years
was 19%, and the number between 31 and 40 years was 36%, and those with number
of 41 years and above was 30%. This implies that the majority of respondents were
young.

4.1.3 Education level of respondents

Out of 79 respondents, 14.25% of the respondents had Certificate, 45.75% had diploma
level and 16.25% had bachelor degree and 23.75% were post graduate. This depicts
that the number of degree holder is low compared to diploma level, but the number of
degree holder is reasonably enough since they are the decision makers; these are head
of departments and their subordinates. Graphically presentation of this findings are
shown on Figure 4.3 below

37
Figure 4.1 Education level of respondents

4.2 Analysis of Finding

This research has contributed to the conceptual and empirical understanding of the
factors that affect revenue collection in Tanzania revenue authority in case of T
Tanzania revenue authority at Dar es Salaam Ilala region. This research specifically
sought to determine how political instability affects revenue collection to find out how
tax policy affect revenue collection, to determine the impact of the support system have
on revenue collection, how the level of performance from staffs affects revenue
collection. How network system affects revenue affect revenue collection, also adequate
information affect revenue collection can be obtained in order to protect revenue
collection and lastly how accountability and transparency affect revenue. Descriptive
and research design were applied and primary data was obtained by use of questions,
interviews, survey and documents reviews. Questions asked were closed ended and were
mainly of a five point like type scale also interviews were use face to face and in survey
was considered by collection of information from respondent and also documents review

38
protected to show information during the research. Simple random sampling technique
was employed to obtain the respondents. Data obtained was analysis by use of
descriptive statistics and presented in frequency tables.

4.2.1 Effect of Political Stability on Revenue Collection

The findings from the 64 respondents show that the political situation affects the
general operations of a business, it means that when their country has not political
stability automatically will lead the shortage or lack of resources, business operations
highly depend on a stable government and stable political environment. This was
shown by numbers of 64 responses being that the political situation does affect business
operations. Therefore, revenue collection can be affected by political instability or
stability. But also political stability may increase normal business operation, improved
investment, affect taxation of individual and the organization spread across various
management disciplines, for example table below.

Table 4.2 Effect of Political Stability on Revenue Collection

Type of respondents Target population Optimal respondents

Accountants officers 4 4

Internal audit officers 13 13

Tax property officers 13 13

Non tax revenue officers 16 16

Legal counsel officers 2 2

Upanga tax center officers 16 16

39
4.2.2 Effect of Tax Policies on Revenue Collection
This section sought to disclose how tax policies affect revenue collection and numbers
53 of respondents felt that the taxation laws put in place were hard to understand and
interpret; this, coming from respondents from Tanzania revenue authority at Mapato
house Ilala region and a majority of management level respondents indicate that the
general level employees with much fewer years of employment found the taxation laws
difficult to understand and interpret. The respondents who are from TRA are in
favorable positions as they can employ tax experts and auditors who with the help of
the laws and policies in place help make administration of the organization easier.
Figure below show the respondents.

Table 4.3 Effect of Tax Policies on Revenue Collection

Type of respondents Target population Optimal respondents

Accountants officers 4 2

Tax property officers 13 9

Internal audit officers 13 11

Non tax revenue officers 16 16

Legal counsel officers 2 2

Upanga tax center officers 16 13

Total 64 53

4.2.3 Effects of Support Systems on Revenue Collection

This section sought to unveil the impact of the support systems have on revenue
collection. This study revealed that the evolution and improvement of information.
Technologies have created avenues for organizations such as TRA to maximize their
productivity and efficiency while improving on quality and cutting costs in the long run.
This was shown by numbers 46 of the respondents who participated. And the results
were.
40
Table 4.4 Effects of Support Systems on Revenue Collection

Type of respondents Target population Optimal respondents

Accountants officers 4 3

Tax property officers 13 7

Internal audit officers 13 12

Non tax revenue officers 16 9

Legal counsel officers 2 1

Upanga tax center officers 16 14

TOTAL 64 46

4.2.4 The impact of adequate information in revenue collection

At this section a researcher was finding information which was provided by respondent
during the preparation of research report. If information provided by respondent to
customer or information provided by customer to its organization staffs is complete,
accurate sufficient, and properly then can affect revenue collection to increase. For
example, during the assessment of revenue made by TRA staffs to its customer, if the
information provided by customer about his or her sales was collect automatically
collection revenue increase due to staffs charged tax depends on assessment made
between two parts. And from that point adequate information affect revenue collection
by increases.

41
Table 4.5 The impact of adequate information in revenue collection

Type of respondents Target population Optimal respondents

Accountants officers 4 3

Tax property officers 13 13

Internal audit officers 13 12

Non tax revenue officers 16 16

Legal counsel officers 2 2

Upanga tax center officers 16 15

TOTAL 64 61

4.2.5 Impact of accountability and transparency with staffs

Researcher was use finding in the way of adopting Accountability and transparency with
the organization staffs through that may affect revenue collection to increase. And also it
brings out a new way of providing real-time information. This not only solves the
customer problems but also service quality can be improved. The relationship
between Tanzania revenue authority and people can be enhanced and make people feel
more connected. Therefore, revenue collection will be high at the all-time due to good
performance of accountability and transparency with the organization staffs to its
customers.

42
Table 4.6 Impact of accountability and transparency with staffs

Type of respondents Target population Optimal respondents

Accountants officers 4 3

Tax property officers 13 13

Internal audit officers 13 12

Non tax revenue officers 16 16

Legal counsel officers 2 2

Upanga tax center officers 16 15

TOTAL 64 61

4.3 Discussion of Findings

On discussing of finding of the research of factors affecting revenue collection in case
of Tanzania revenue authority, political stability or instability are affects several
economic variables such as taxation issues, main results show that an increase in capital
taxation for the redistributive purpose reduced the investment in the legal system were
determine induced by political instability and uncertainty. And also tax policy such as
regulation and procedures have many impact on revenue collection like economy,
Collection costs by the government and compliance costs by the taxpayer should be by
the taxpayer should be minimized, ability to pay for example the taxpayer should pay
an amount based on his ability to pay, which depends on his income. and also Certainty
describe tax structure should be predictable and consistent, meaning that the taxpayer
should know when and where and how the tax will be levied, so that individuals and
businesses, and other organization can readily ascertain the tax consequences of any
endeavor or transaction .and also information technology has encouraging in revenue
collection such as computer system encourage on revenue collection for example in
TRA computer system was provide on recording information on softcopy rather than
manual. Therefore, all factors discussing are importance in revenue collection

43
according to detail and information provided by TRA staffs.

44
 CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.0 Introduction
This chapter highlights the conclusions and recommendations based on the findings of
this study. More specifically, the chapter discusses the summary of the research
questions that guided the research, the methodology that was used to study those
objectives and the findings resulting from the study. Finally, the section highlighted the
implication, limitations and recommendations of the research

5.1 Summary of Findings

5.1.1 Political Stability

The first objective was to determine how political instability affects revenue collection.
Data was analyzed with regard to the political instability to revenue collection.
Respondents gave their views and opinions as to how political instability affects revenue
collection. The majority of respondents agreed that political situation does in-fact affect
the general operations of a business, be it from heightened insecurity for its workforce,
to shortage or lack of resources, business operations highly depend on a stable
government and stable political environment. In other words, political stability has a
vigorous and noteworthy total effect but a trivial direct effect on operations of a
business.

5.1.2 Policies
The findings in this study have shown that, majority of the respondents agreed that laws
on taxation hard to understand and interpret. This corresponds with past studies (Camilo,
2010), who found that People don't like paying taxes. That’s because they don’t
understand them. However, some researcher like Bonus and Jackson (2013) in Zambia
came with same findings. According to them, tax laws are always complicated to the

45
side of taxpayers. Also researcher was interested to know from the respondents if the
laws on taxation make administration of the organization easier. From the findings the
respondents felt that because the taxation laws are not ambiguous, and they do not
change frequently, they enhance better planning for the organization and thus make
administration of the organization easier. Also the findings reveal that imposition of tax
laws enhanced protection of the environment.

5.1.3 Support Systems on Revenue Collection

The Researcher determined the impact of the support systems have on revenue
collection. The study revealed that evolution and improvement of information
technology has created avenues for organizations to maximize their productivity and
efficiency while improving on quality and cutting costs in the long run. TRA online
services portal and do-it-yourself services have promoted compliance as they have made
compliance possible at the comfort of one’s office or home with the help of the internet.
Also, majority of the respondents agreed that the level of quality of service offered
by, TRA personnel are an important factor to revenue collection.

5.1.4 Level of performance

The finding shown the impact of the level of performance into revenue collection. The
respondents provided the information that shown performance of the staffs and others
member relating to Tanzania revenue authority activities led revenue collection to be
better for example motivation, allowance, extra duties were encouraging the staffs to
perform their duties and other activities signed to be performed. But also segregation of
duties with the staffs led level of performance with the staffs to be higher due to each
person performed their duties according to their levels of duties Therefore level of
performance lea better revenue collection at Tanzania revenue collection.

46
5.1.5 Internal control system
The finding shown that internal control system led impact on revenue collection. The
respondents gave information that internal control systems were encouraged in
contribution of revenue collection at Tanzania revenue collection, for example
Segregation of Duties. When work duties are divided or segregated among different
people to reduce the risk of error or inappropriate actions. Physical Controls,
Reconciliations Policies and Procedure Transaction and Activity Reviews, Information
Processing Controls, those were examples led revenue collection in Tanzania revenue
collection. Therefore, internal control system encouraged in revenue collection but also
internal control system was reducing time management like activities which done
through manual report was protected by using control system.

5.1.6 Adequate information

The finding shown that adequate information from difference people such TRA staffs to
its clients, or clients to the staffs or principles to members. The respondents shown that
better information from both side were led impact of revenue collection in Tanzania
revenue collection. For example, if there Inadequate or incomplete information can lead
to delinquent churn. If someone enrolls in your service with a credit card that expires,
but no contact information, that will inevitably cause difficulties within your revenue
collection. Without the proper information, resolving the matter can be extremely
difficult, if not irreparable, and also Personal information changes People may try to
change their address or phone number as a way to avoid paying a debt they owe. People
will also fail to communicate change of information.

5.1.7 Accountability and transparency

The finding shown that accountability and transparency encouraged the revenue
collection of the Tanzania revenue collection through the staffs. It means that respondent
shown performance information about the organization in a certain reporting period such
as: Information about the organization’s purpose, vision, values and strategic goals,

47
Statements from the organization’s leaders such as its CEO and region officers, Profiles
of directors and information about the organizational structure, Information about key
organizational, resources (such as staff and volunteers); and Information about the
organization’s activities within the reporting period, including key statistics and
performance data.

5.2 Conclusion
The study concludes that the political stability and gave different impacts of the
political environment on revenue collection. The study further concludes that closeness
to the general elections instills fear in the general citizens and hence inhibits normal
operations to everything they undertake; Political stability of the country affect
taxation of individuals and organizations, the study further concludes that there is a
direct relationship between political stability and the revenue collection. The study
concludes that taxation accomplished redistribution of wealth, that is, taxation was a
means by which the government raises funds to build schools, hospitals and other
social amenities for the good of the larger community. The study further concludes that
the evolution and improvement of information technology has created avenues for
organizations to maximize their productivity and efficiency. The study also
concludes that revenue collection can be enhanced by improvement on the quality of
service that is offered by the personnel of TRA to the taxpayers and also the study
concludes that. Accountability and transparency for the staffs led enhance of revenue
collection therefore should be provide segregation of duties with the staffs in order to
increase accountable with the TRA staffs, also adequate of information such as
disclosing of relevant information lead enhance of revenue collection to the Tra so the
staffs should provide or disclose relevant information specific space in order to increase
revenue collection.

48
5.3 Recommendations

5.3.1 Recommendations for Action

In respect of the research findings, the study recommends
that:
TRA Online Portal should be monitored and controlled because of its adverse effect on
planning and implementation of tax collectivity; respective agencies (federal, state and
local government).responsible for tax collection should sensitize eligible and
potential tax payers on the process and suitability of online tax registration by tax
payers in other to enhance its impact on tax administration in the country; online tax
remittance should be encourage among tax payers because it enhance flexibility in
tax collection, but it must be controlled with manual remittance due to its inverse
impact on planning and implementation of tax administration; and replica of the study
should be carried out in other parts of the country in other to re-validate and test the
applicability of the findings in them. This study recommends that the policy makers
should take relevant measures to ensure stable equilibrium for the exchange rates as
they adversely affect the revenue collection process. The policy makers need to
evaluate the best exchange rate policy for optimal economic development. And also
TRA should ensure that segregation of duties is implemented with the staffs according
to their capacity, education, and ability to perform different activities, and also due to
manipulation of the staffs, the organization should provide education with their staffs
about core value of the organization.

5.3.2 Recommendations for Future Research

The study has highlighted the factors that affected Revenue Collection in the Tanzania
Revenue Authority with evidence from TRA Dar es salaam region. Further studies need
to be done on the following issues;
i. What is the perception of taxpayers regarding the misuse of revenue collected by
the authority in relation to revenue evasion?
ii. To what extent has TRA been able to address revenue evasion?

49
iii. Factors that affect the accuracy, fairness and timely tax collections.

50
 REFERENCES
Adams, C. (2006). For Good and Evil - The Impact of Taxes in the Course of
Civilization. Institute of Public Finance, 513.

Afolabi, A. (2010). The Colonial Taxation Policy among Yoruba of South Western
Nigerian and its Implications for Socio - Economic Development. Journal of
the Historical Society of Nigeria, 64.

Aizenman, J., & Jinjarak, Y. (2009). Globalization and Developing Countries - a

Shrinking Tax Base? Journal of Development Studies, 653-671.

Aizenman, J., & Jinjarak, Y. (2005). The Collection Efficiency of Value Added Tax:
Theory and Internation Evidence. Department of Economics, 3.

Alesina, A., Ozler, S., Roubini, N., & Swagel, P. (1992). Political Instability and
economic Growth. Journal of Economic growth, 2-7.

Awitta, M. (2010). Effectiveness of Revenue Collection Strategies at Kenya Revenue

Authority in Nairobi. Nairobi: University of Nairobi.Afonso, A., L.
Schuknecht, and V. Tanzi, (2005), “Public Sector Efficiency: An International
Comparison,” Public Choice, Vol. 123, No. 3–4, pp. 321–47

Bahl, R and Bird R (2008), Sub national Taxes in Developing Countries, The Way
Forward, Financial Publications

Big Result Now (2012): Resource Mobilization – Non Tax Revenue, World Class Lab
Report

Controller and Auditor General (CAG) (2012): Management of Outsourced Revenue

Collection Function by Local Governments, A Report of the Controller and
Auditor General of the United Republic of Tanzania, Dar es salaam.

51
Finances and Financial Management in Tanzania: Empirical evidence of trends 2000-
2007”. REPOA Special Paper No. 10-2010. Dar es Salaam

Fjeldstad, O.-H., Ka t e ra , L. , M s a m i , J . &Ngalewa, E. (2010) “Local

Go ve r n m e nt Finances and Financial Management in Tanzania: Empirical
evidence of trends 2000-2007”. REPOA Special Paper No. 10-2010. Dar es
Salaam

Fjeldstad, Odd-Helge and Joseph Semboja (1999) “Local Government Taxation and
Tax Administration in Tanzania CMI Report 3” Bergen: Chr. Michelsen
Institute Fjeldstad, O.-H., Ka t e ra , L. , M s a m i , J . & Ngalewa, and E.
(2010) Local Go ve r n m e nt

Fjeldstad, Odd-Helge and Joseph Semboja, (2000) “Dilemmas of Fiscal

Decentralization: A Study of Local Government Taxation in Tanzania. Forum
for Development Studies 27 (1): 7-41”.

Kakwesigabo, L . P ( 2010): The R e l a t i o n s h i p b e t w e e n R e v e n u e

C o l l e c t i o n a n d Expenditure in Tabora District Council, Unpublished
MBA Thesis, Mwanza

Miyahira, H. (2008). Using Information Technology to improve Tax and Revenue

Collection. 4-10.

Mugenda, O . , & M u g e n d a , A . G. (1999). Research M e t h o d s : Quantitative and

Qualitative Approaches. African Centre for Technology Studies.

Mzenzi I. S (2013): Revenue Mobilization Issues in the Tanzanian LGAs, CLKnet

Policy Brief No. 7:2013

United Republic of Tanzania (1982): Local Government Finance Act, Cap 287 & 290RE
2002, Government Printer, Dar es Salaam

52
URT, (1997): Local Government Authorities Financial memorandum, Dar es Salaam,
Government pressure, (2004): Public Procurement Act No. 21, Dar es Salaam,
Government Press

URT, (2009): “Annual general report of the Controller and Auditor General on the
financial statements of Local Government Authorities for the year 2008/2009”
Dodoma

53
 APPENDICES
APPENDIX 1: LETTER FOR DATA COLLECTION

I’m GODFREY M FILBERT, a student from Mzumbe university Mbeya campus

college. I am doing research on Factors affecting revenue collection in Tanzania
Revenue Authority, a case of TRA Dar es salaam llala region at Mapato House, and
therefore the purpose of this questionnaire is to capture information that will reflect the
study topic at Tanzania revenue authority in particular as a study area. I kindly ask you
to assist me in my study by answering the following questions. I assure you that your
information will be kept confidential.
For further inquiry, please contact me at mobile – 0756453241

PART A: BACKGROUND INFORMATION

1. Please indicate your Organization’s Primary Industry affiliation (multiple

Selections allowed)
(1) Food manufacturers
(2) Agriculture
(3) Banking
(4) Government
(5) Wholesalers
(6) Oil and Transport
(7) Domestic Excise
(8) Insurance Other Manufacturers
(9) Construction Oil Mining and exploration Services
Other (please specify) ………………………………

54
2. How long have you worked in your organization?
[a] Over 20 years
[b] 16 – 20 years
[c] 11 – 15 years
[d] 5 – 10 years
[e] Below 5 years

3. Level of employment?
[a] Senior Management [b] Management [c] Supervisory [d] Employee

PART B: FACTORS AFFECTING REVENUE COLLECTION

I: Effect of Political Stability on Revenue Collection

1. Does the political situation of the country affect normal business operations?
[a] Yes [b] No [c] Not Sure

2. Does the closeness to general elections affect normal business operations?

[a] Yes [b] No [c] Not Sure

3. Political stability is characterized by improved investments due to investor

confidence, expansion of the economy, security for employees and the general
population, lower levels of inflation and confidence in the government and the policies
it puts in place.
[1] [2] [3] [4] [5]
Strongly Disagree Neutral Agree Strongly Agree

4. Political instability is characterized by pulling out of investors and high inflation

55
levels, reduced confidence in the government and its policies, high levels of insecurity
for the whole society, reduced capital in the economy.
[1] [2] [3] [4] [5]
Strongly Disagree Disagrees Neutral Agree Strongly Agree

5. In your opinion, does political stability of the country affect taxation of individuals
and organizations?
[a] Yes [b] No [c] Not Sure

II. Effect of Tax policies on Revenue Collection

6. In your opinion, are the laws on taxation hard to understand and interpret?
[a] Yes [b] No [c] Not Sure

7. In your opinion, do the laws on taxation make administration of the organization

Easier?
[a] Yes [b] No [c] Not Sure

8. In your opinion, do the laws set accomplish redistribution of revenue, that is, from
the
businesses’ profits and individuals’ incomes to social development amenities
(development of public resources)?
[a] Yes [b] No [c] Not Sure

9. In your opinion, do the laws set enhance protection of the environment e.g. anti
dumping laws and the TEBS regulations?
[a] Yes [b] No [c] Not Sure

10. When you pay taxes, do you achieve the feeling of accomplishment as you are part
of nation building?
56
 [a] Yes [b] No [c] Not Sure
III: Impact of Information Technology and Human Resources on Revenue
Collection

11. Information Technology has created opportunities for the organization to amplify its
productivity and effectiveness while cutting costs of production in the long run.
[1] [2] [3] [4] [5]
Strongly Disagree Disagree Neutral Agree Strongly Agree

12. Information technology systems have made it easier for the organization to comply
with the tax laws and policies in place
[1] [2] [3] [4] [5]
Strongly Disagree Disagrees Neutral Agree Strongly Agree

13. The introduction of the TRA Online Portal and do-it-yourself services has made it
easier for taxpayers to comply with the tax laws at the comfort of their offices or homes
[1] [2] [3] [4] [5]
Strongly Disagree Disagrees Neutral Agree Strongly Agree

14. Trained and well informed and knowledgeable TRA personnel clarify all questions
regarding taxation and make compliance with the tax laws easier
[1] [2] [3] [4] [5]
Strongly Disagrees Disagrees Neutral Agree Strongly Agree

15. The level of quality of service offered by TRA personnel is an important factor to
revenue collection
[1] [2] [3] [4] [5]
Strongly Disagree Disagrees Agree Neutral Strongly Agree

57
 1V Effect of internal control system on revenue collection
16. The impact of internal control system were able to led efficiency of operation?
[1] [2] [3] [4] [5]
Strongly Disagree Disagrees Agree Neutral Strongly Agree

17. internal control system were able to be one of the factor affecting revenue
collection?
[1] [2] [3] [4] [5]
Strongly Disagree Disagrees Agree Neutral Strongly Agree

18. The internal control system were able to reduce human errors ant time
management?
[1] [2] [3] [4] [5]
Strongly Disagree Disagrees Agree Neutral Strongly Agree

V The impact of adequate information on revenue collection

19. The impact of increased adequate information from the TRA staffs may led enhance
of revenue collection?
[1] [2] [3] [4] [5]
Strongly Disagree Disagrees Agree Neutral Strongly Agree
20. Information obtained from TRA staffs may be enough for one of factor of revenue
collection?
[1] [2] [3] [4] [5]
Strongly Disagree Disagrees Agree Neutral Strongly Agree

VI The impact of accountability and transparency of TRA staffs on revenue

collection.

58
21. Accountability and transparency with the TRA staffs may led revenue collection to
be increased?
[1] [2] [3] [4] [5]
Strongly Disagree Disagrees Agree Neutral Strongly Agree

59