Electronic Payment and Revenue Collection in Local Government Authorities in Tanzania: Evidence from Kinondoni Municipality

Abstract

This paper examines the role of e-payment on revenue collection in Kinondoni Municipal, Dar es Salaam, Tanzania. A semi-structured questionnaire was distributed to revenue collectors and administrators using simple random sampling procedure; obtaining a total of 77 respondents. Data were analysed using descriptive statistics and linear regression. The findings revealed that most of the respondents admitted that e-payment influences revenue collection by enabling the Municipal increase tax compliance. It was further revealed that e-payment can provide additional competitive edge in monitoring revenue sources, and improving the quality of financial reporting. Furthermore, the findings revealed a positive linear relationship between e-payment and revenue collection in terms of tax compliance, monitoring of revenue sources, and financial reporting. The study indicated that all e-payment modes are aligned with tax compliance. Apart from positive achievements of e-payment, poor connectivity, limited awareness, lack of technical assistance, poor experience of the technology by tax collectors, and unreliable power supply were considered as challenges in implementing e-payment system. Thus, to hasten the use of e-payment system in revenue collection, it is crucial to address the identified challenges and conduct training to all tax collectors and tax payers. Also, the geographical information system (GIS) should be integrated in the e-payment system to automate the process of allocating revenue sources.

Local Original Revenue Receipts Before and After Electronification Local Government Transactions

“…Non-cash policies in government can be limited by human resources, dispositions, bureaucracy, and physical resources (Setiawan et al, 2022a). Training for all involved should be conducted (Kessy, 2020). The low implementation of noncash transactions is due to a lack of socialization in the community, limited facilities and infrastructure, and low commitment of local governments (Maulina & Ritonga, 2021).…”

The Effect of Upturn National Bank Billing System on Revenue Collection in the County Government of Nandi in Kenya

“…There is a dearth of literature on e-billing systems on revenue collection. Kessy [11] analyzed electronic payment and revenue collection and indicated that e-payment has a notable impact on the process of revenue collection. The findings also highlighted that epayment has the potential to offer a competitive advantage by enhancing the monitoring of revenue sources and elevating the quality of financial reporting.…”

“…Kessy [11] explored revenue collection and electronic payments in Tanzanian local government. A semi-structured questionnaire was distributed to revenue collectors and administrators, and 77 respondents in all were chosen.…”

Geospatial Information Technology Systems And Revenue Collection: The Case of Ilala City Council And Kinondoni Municipal Council

“…Each independent variable was analysed to determine its contribution to GITS performance in the local government revenue collection. Technological factors describe the properties of a technology in a local government authority: such properties comprise costs, equipment, methods, and functionalities that use technology (Masser & Craglia, 2020;Kessy, 2019;Haneem & Kama, 2018;Namangaya, 2018). Organizational factors are procedures taken by an organization to facilitate the creation of the organizational environment as presented by the majority of IT applications in the context of LGAs (Ishengoma et al, 2019;Haneem & Kama, 2018).…”

“…In Tanzania, initiatives have been taken by LGAs since the 1990s to establish GITS and integrate it into their functions to enhance revenue collection and implement spatial technologies (Mzava et al, 2019;Namangaya, 2018;Worrall et al, 2017;Mtalo, 2016;World Bank, 2015). Since 2006, numerous GITSs have been obtained and installed in LGAs in Tanzania, with the assistance of the World Bank, TSCP, and PO-RALG (Sausi et al, 2021;Kessy, 2019;McCluskey & Huang, 2019;McCluskey et al, 2018;Pérez-Mira et al, 2017) to support decision-making, policy, and planning. Nevertheless, despite significant investments made in GITSs by the Tanzania government, the majority of LGAs in the country only met roughly between 40%-70% of their collection goals (CAG, 2020).…”