Inter-organisational cooperation in revenue collection has received limited attention in the tax administration literature. Recent experiences from Tanzania offer a unique opportunity to examine opportunities and challenges facing such cooperation between central and local government agencies in a developing country context. The administration of property taxes (PT) in Tanzania has been oscillating between decentralised and centralised collection regimes. This paper aims to examine how inter-organisational cooperation affected implementation of the reforms.
The study draws on data from a variety of sources of information collected during a series of fieldworks over the past decade. Semi-structured interviews were conducted with a wide range of stakeholders, including senior managers and operational staff of the national and municipal tax administrations. The interviews focused on the background and objectives of the property tax reforms, working relations between the central and local government revenue administrations, technical and administrative challenges and innovations, and changes over time with respect to revenue enhancement and implementation of the reforms. Relevant tax legislation and regulations, budget speeches and reports were reviewed.
Two lessons of broader relevance for policy implementation and PT administration are highlighted. First, institutional trust matters. Top-down reform processes, ambiguity related to the rationale behind the reforms and lack of consultations on their respective roles and expectations have acted as barriers to constructive working relationships between the local and central government revenue agencies. Second, administrative constraints, reflected in poor preparation, outdated property registers and valuation rolls and inadequate incentives for the involved agencies to cooperate hampered the implementation of the reforms.
This paper contributes to the literature on inter-organisational cooperation in revenue collection through a detailed case study of property tax reforms in a developing country context. It also contributes to the literature on policy implementation by identifying political and administrative factors challenging the reform process. In line with this literature, the study shows that policy implementation is not necessarily a coherent process. Instead, it is frequently fragmented and disrupted by changes in policy formulation and access to adequate resources.
The authors would like to thank Sosina Bezu, Kendra Dupuy, Hassan Essop, Jan Isaksen, Sam Jibao, Ingrid Hoem Sjursen, Ole Therkildsen and two anonymous reviewers for valuable comments on earlier versions of this paper. Helpful comments were also received from participants at the African Property Tax Initiative Capacity Building Workshop, Dakar, Senegal, 13 June 2018, and at the African Tax Institute/Lincoln Institute of Land Policy Symposium on Urbanization and Property-related Taxation. Mont Fleur, Stellenbosch, 28-30 July 2017. Part of the data collection was conducted with assistance from Samwel Ebenezeri, Juda Lyamai and Joanita Magongo. Points of view and possible errors are entirely our responsibility. The article was prepared with financial support from the International Centre for Tax and Development and the Norwegian Embassy in Dar es Salaam.
Fjeldstad, O.-H., Ali, M. and Katera, L. (2019), "Policy implementation under stress: Central-local government relations in property tax administration in Tanzania", Journal of Financial Management of Property and Construction, Vol. 24 No. 2, pp. 129-147. https://doi.org/10.1108/JFMPC-10-2018-0057
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