Revenue Gap Analysis between Own Source Revenue Estimates (OSRE) and Actual Own Source Revenue Collection (AOSRC): A Case of Local Government Authorities (LGAs) in Tanzania

The empirical study was conducted in financial year 2016/2017 in four LGAs namely, Bahi DC, Kongwa DC, Manyoni DC and Dodoma MC in Tanzania mainland to analyze revenue gap between Own Source Revenue Estimates (OSRE) and Actual Own Source Revenue Collection (AOSRC) for five financial years from 2011/2012 to 2015/2016. However, Dodoma Municipal Council availed data set from the financial year 2012/2013 to 2016/2017 due to missing data of 2011/2012 financial year in the database. In most of the financial years investigated, the empirical study revealed that actual own source revenue collections were less than the own source revenue estimates due to unrealistic data of own source revenue estimates, narrow base of own revenue sources and unstable of available own revenue sources including produce cess, business licence fee, service levy, market dues, slaughter fee, livestock fee, bus stand fee, land tax, fish cess, mining fee, forest cess, auction fee, car parking fee, fines and penalties among others. Hence, the empirical study suggested that LGAs have to carry out frequent surveys to identify potential own revenue sources so as to come up with realistic data for own source revenue estimates. Moreover, LGAs have to broaden the base of their own revenue sources by identifying new own revenue sources as well as stabilizing the available own revenue sources with the aim of bridging the gap between the own source revenue estimates and actual own source revenue collection for local government revenue enhancement so as quality social services can be delivered to the Tanzanian community.