Contract Management in Outsourced Revenue Collection in Local Governments in Tanzania: Experience from Selected Local Government Councils

Abstract

Local Government’s Capacity for Contract management in outsourced revenue collection in Tanzania has become the major topic of discussio. This paper explores recent issues concerning Contracts management in outsourced revenue collection in Tanzania, including feasibility studies prior to outsourcing revenue collection, design of the contracts for revenue collection, monitoring of the performance of the private companies in revenue collection, timely remittance of revenues by the private companies to local councils as well as financial and human resources capacity in enforcing these contracts. The study adopted the case study research design and the methods of data collection were interviews and documentary review. The findings indicate that key problems to contract management and enforcements are corruption, collusion between local government officials and private companies, laxity in conducting feasibility studies and poor monitoring of private companies which do not bring the desired outcomes in terms of revenue collection. Based on the study findings, this research concludes that the private companies and Local governments should comply with contractual agreements and improve human and financial resources capacity in order to provide revenue saving from outsourced revenue collection.