Every morning across Tanzania, local government revenue collectors set out with a mix of receipt books, point-of-sale devices, and mobile phones. They navigate markets, bus stands, and small businesses, collecting fees that fund essential municipal services.
The process appears modern, with digital devices flashing and SMS confirmations occasionally pinging. However, beneath this veneer of technological advancement lies a system fundamentally compromised by human discretion.
In many municipalities, the journey of a single shilling from a market vendor’s hand to the government’s consolidated fund is fraught with vulnerabilities. A vendor might pay a daily fee in cash, which the collector pockets while promising to enter the transaction into the digital system later. Sometimes the entry is made, but often it is delayed, altered, or entirely forgotten before the collector moves to the next point.
Transactions are completed in minutes, often without printed receipts or immediate digital entry. By the end of the day, figures are compiled and reported as collected revenue, giving an appearance of order and performance. What remains largely invisible is how much revenue never formally enters the system.
Structural design problem
The latest Controller and Auditor General (CAG) report brings this reality into sharp focus. It does not simply highlight administrative weaknesses; it exposes a structural design problem in how revenue is collected and controlled.
Sh1.67 billion in revenue was not banked, Sh10.28 billion was unremitted by agents, and another Sh5.34 billion was lost through under-collection and incorrect rate application.
These losses are not occurring after money is securely inside government systems. They are occurring at the entry point, before funds are formally recorded.
This distinction is critical, as it shows that the core problem is not the absence of digital systems, but the continued reliance on human intermediaries at the most vulnerable stage of revenue collection.
Platforms such as GePG and LGRCIS exist, but they are frequently layered onto processes that still begin in cash and discretion. In such a setup, digital tools function more as reporting instruments than enforcement mechanisms. The result is what can accurately be described as cosmetic digitisation.
Cosmetic digitisation?
Systems appear modern on paper, dashboards exist, and reports are generated, yet the underlying collection process remains exposed to leakage through manual handling.
READ MORE: Too Expensive to Go Cashless: The Cost of Digital Payments in Tanzania
The CAG findings reinforce this pattern by noting off-system collections, incomplete databases, and weak enforcement of approved procedures. Some revenues bypass formal systems entirely through manual transactions and asset sales conducted outside digital oversight.
Even the reported over-performance of local government revenue—111 per cent of targets—does not contradict this reality. It instead reflects a deeper structural issue: targets are being set below potential capacity, whilst actual collection efficiency remains compromised by leakage before entry into official systems. This is not a failure of technology availability, but a failure of system architecture.
Tanzania has invested in digital infrastructure, but it has not fully redesigned revenue collection to eliminate discretionary human handling.
As long as municipal officers can collect cash directly, and as long as transactions can originate outside controlled platforms, leakage is not an anomaly—it is a built-in outcome.
Learning from others
A more instructive comparison is Kenya’s digital revenue ecosystem, particularly through platforms such as eCitizen and integrated mobile payment systems used by counties.
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The key difference is not enforcement design, but structural integration. In many cases, payments are structured so that official fees cannot be completed outside the system.
This reduces discretionary handling and strengthens traceability from transaction initiation to final reporting. Tanzania’s own long-term development blueprint, Dira 2050, correctly identifies digital transformation as central to efficiency and transparency in governance. However, the CAG findings already signal a gap between ambition and implementation.
Weak internal controls, incomplete integration of databases, and slow execution of audit recommendations—only 36.7 per cent fully implemented—show that digital reform is still operating alongside, rather than replacing, manual systems. There is also an underlying governance reality that cannot be ignored.
Cashless systems
Cash-based collection systems preserve discretion, and discretion in revenue collection often creates informal value chains within institutions.
Removing cash handling is therefore not only a technical shift but an administrative and political one, because it reduces the space for informal negotiation and control. This is precisely why partial digitisation will continue to fail, as hybrid systems merely relocate money leakage.
READ MORE: Experts Explain How Govt Can Prevent Loss of Billions in Revenues Due to Faulty ICT Systems
Revenue collection at the local government level must be fully cashless, with no parallel manual collection channels permitted under any circumstance. All transactions must originate within approved digital systems and not be entered retrospectively after cash exchange.
Accountability must be tied to system compliance, not just aggregate revenue performance, because strong collection figures mean little if significant leakage occurs before entry into official records.
The CAG report provides evidence that the current model allows revenue to be lost at the most fundamental stage of collection.
Until Tanzania redesigns its revenue architecture to remove human discretion at the point of transaction, digital systems will continue to operate as overlays on a manual economy.
The technology exists, and the reporting systems exist; what remains missing is the structural decision to make it impossible to collect public revenue outside them.
Mariam Gichan is an archaeologist and journalist based in Dar es Salaam. She can be reached at mariamgichan@gmail.com or on +255 754 215 690. The opinions expressed here are the writer’s own and do not necessarily reflect those of The Chanzo. If you are interested in publishing in this space, please contact our editors at editor@thechanzo.com.
