Assessment of Factors Affecting Revenue Generation in Local Government Authorities: A Case Study of Babati Town Council

Local Government Councils in Tanzania have adequate revenue sources, but collection strategies are weak to generate adequate revenue. The main objective of the study is to assess factors affecting revenue generation in Local Government Authorities. The study was narrowed in assessing the influence of Council financial facilitation on revenue generation, inefficient monitoring on revenue collection, political interference on revenue sourcing and awareness of Councilors and Stakeholders on revenue collection and implementation of budget. A cross sectional descriptive study was carried out in Babati Town Council where a purposive random sampling technique was used to obtain 100 respondents from among the staff involved in revenue collection. Data were collected by using structured questionnaires, office review and interview also done. Analysis of data was done by using descriptive statistics with computer software SPSS version 16 and presented by using tables. Council financial facilitation and political interference were ranked of high influence by respondents. These affected revenue generation to a greatest extent. Lack of training of Councilors and Stakeholders was ranked of low influence and management support was ranked of moderate influence. The study revealed that management support and lack of training to Councilors and other Stakeholders affected revenue collection to a less extent. The study concludes that LGAs in Tanzania are faced with challenges in generating revenues from both internal revenue sources and receiving grants from the Central Government. These bring a gap between budget estimates and the actual collections. The LGAs’ financial ability for service delivery to the community is weakening which requires special management attention to rectify