Experiences from Local Authorities in Tanzania

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Outsourcing Revenue Collection to Private Agents:

Experiences from Local Authorities in Tanzania

Odd-Helge Fjeldstad, Lucas Katera &

Erasto Ngalewa

RESEARCH ON POVERTY

ALLEVIATION

R E P O A

^RE

SEARCH ON POVERTY

ALLEVIATION

R E P O A

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ISBN: 978 – 9987-615-35-3 REPOA

RESEARCH ON POVERTY ALLEVIATION

Special Paper No. 09.28

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Outsourcing Revenue Collection to Private Agents:

Experiences from Local Authorities in Tanzania

Odd-Helge Fjeldstad, Lucas Katera and Erasto Ngalewa

Special Paper 09.28

Mkuk na Nyota Publshers P. O. Box 4246, Dar es Salaam, Tanzana

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Publshed for: Research on Poverty Allevaton (REPOA) P. O. Box 33223, Dar es Salaam, Tanzana 157 Mgomban Street, Regent Estate Tel: + 255(0)(22) 270 00 83 /277 2556 Fax: + 255(0)(22)277 57 38

Emal: [email protected] Webste: www.repoa.or.tz By: Mkuk na Nyota Publshers

6 Muhonda St., Msson Quarter, Karakoo P. O. Box 4246, Dar es Salaam, Tanzana Emal: [email protected] Webste: www.mkuknanyota.com

Suggested Ctaton:

Fjeldstad, Odd-Helge, Katera, Lucas and Ngalewa, Erasto.

‘Outsourcing Revenue Collection to Private Agents: Experiences from Local Authorities in Tanzania.’

Special Paper 09.28, Dar es Salaam, REPOA

Suggested Keywords:

Tanzania, local government authorities, private revenue collection, accountability, transparency

ISBN: 978 – 9987-615-35-3 REPOA 978-9987-08-028-1 Mkuk na Nyota

All rghts reserved. No part of ths publcaton may be reproduced or transmtted n any form or by any means wthout the wrtten permsson of the copyrght holder or publsher.

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aCknowledgemenTs

Ths paper s the result of a cooperatve research between Chr. Mchelsen Insttute (CMI) and Research on Poverty Allevaton (REPOA). The research s financally supported by the Norwegan Embassy n Tanzana through the research programme, ‘Formatve process research on the local government reform n Tanzana’. Earler versons of the paper were presented at REPOA’s Annual Research Workshop 26 March 2007, and at a Governance Workng Group meetng n Dar es Salaam. The authors would lke to thank workshop partcpants for ther constructve comments. Thanks also to an anonymous revewer for revewng the paper.

The ponts of vew expressed and any errors n the final text are entrely the responsblty of the authors.

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absTraCT

Many local government authortes n Tanzana have reformed ther tax collecton systems n recent years n order to ncrease ther revenue. Ths paper examnes experences wth outsourced revenue collecton of some local government authortes n Tanzana. Based on evdence from four urban and three rural councls, the study examnes how systems of prvatsed tax collecton perform wth respect to revenue generaton, admnstraton, and accountablty over 1996 to 2006. The selected councls are Dar es Salaam and Mwanza Cty Councls, Ilala and Knondon Muncpal Councls, and Klosa, Ksarawe and Mosh dstrct councls.

The study concludes that outsourcng offers no ‘quck-fix’ to ncrease local government revenues or to reduce tax admnstratve problems. Whle collecton has ncreased and become more predctable n some councls whch have outsourced revenue collecton, others have experenced substantal problems wth corrupton and exceptonally hgh profit margns for the prvate agents at the expense of accomplshng a reasonable return to the respectve local government authortes. However, when approprately managed and montored, outsourced revenue collecton may establsh a foundaton for more effectve and efficent local government revenue admnstraton.

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exeCuTive summary

The purpose of ths paper s to examne recent experences wth outsourcng of revenue collecton n local governments n Tanzana. The research s guded by the followng questons:

(1) What are the major constrants and opportuntes facng prvate collecton of local government revenues?

(2) What allowances are made for the prvate collectors’ profit margn?

Seven local government authortes were selected for n-depth study: Dar es Salaam and Mwanza Cty Councls, Ilala and Knondon Muncpal Councls, and the three rural dstrct councls Klosa, Ksarawe and Mosh.

key features of revenue outsourcing in the Case Councils

Revenues sources

Mwanza Cty Councl poneered the outsourcng of revenue collecton n Tanzana as early as 1996, and snce 2000 an ncreasng number of local authortes n Tanzana have adopted prvate tenderng systems for the collecton of dfferent types of taxes. These nclude property taxes, market fees, forestry leves (untl 2005), cess on certan agrcultural products, bus stand and parkng fees.

Revenue collection agents

Revenue collecton s outsourced to a range of dfferent types of agents wthn and across the councls studed. These nclude: a prvate consultancy firm specalsed n provdng tax advce to the prvate sector, a firm prncpally engaged n operatng prvate schools, market assocatons, co-operatves and a fish dealer organsaton.

Tendering process

Outsourcng of revenue collecton s generally based on an open tender process, referrng to gudelnes provded by the Local Government Reform Programme (June 2003) and the Public Procurement Act No 21 of 2004. In a number of cases, councls have termnated the contracts n accordance wth the Arbitration Ordinance (Cap. 15) of 1931 due to defaults by some agents.

benefits and Costs of outsourcing: experiences from the Case Councils

Revenue enhancement and predictability

Revenues from taxes where the collecton s outsourced and a share of the total revenue collecton from the councl’s own sources dffer across the councls; rangng from 10% to over 60%.

Outsourcng often yelds more revenue compared wth councl based collecton from smlar sources. However, the data from ths case study suggest only margnal dfferences over tme n revenue collecton from sources collected by prvate agents and those collected by the councls.

Two nterrelated factors may explan these findngs. Frst, the revenue bases whch are outsourced are those whch are consdered by the councls to be most problematc and/or costly to collect -

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handled by prvate contractors. Hence, revenue yelds from these taxes are expected to ncrease.

Second, by leavng the ‘problematc’ sources to prvate contractors, the councl may concentrate ts enforcement on the remanng revenue sources, therefore the yelds from these are therefore lkely to ncrease as well.

Cost effectiveness and reallocation of council staff

Outsourced collecton generally mples lower admnstratve costs for local government authortes by shftng the collecton costs to the prvate sector rather than utlsng government employees for the same purpose. Furthermore, due to the seasonal aspect of some revenue sources, a prvate agent or market assocaton has much more flexblty n labour nputs than a councl, thus reducng the operatonal costs of revenue collecton. Accordng to representatves from the councl management teams, reallocaton of staff and less poltcal nterferences n the day-to-day operatons of tax collecton are major benefits of outsourcng..

Monitoring the private agents

In the ntal phase of outsourcng, several councls had the experence of some agents not complyng wth ther contracts, ether by not submttng the revenues they had collected, or by submttng less money to the councl than stpulated n the contract. These problems were partly due to the agents’

lack of experence, whch was reflected n overambtous bds, and partly because the agents n some cases dd not pay ther own collectors properly, whch reduced ther ncentves to collect. Also, some agents embezzled and dsappeared wth the revenues they had collected. Based on these experences, bdders are now requred to provde a bank statement and a bank guarantee or mmoble assets as securty. To avod substantal losses by default or embezzlement, the agents must submt revenues to the councl n frequent nstalments.

Corruption

Comprehensve assessments of the revenue potental of tax bases are essental for mnmsng corrupton, but the capacty to conduct analyss s stll poor n many councls. Ths study found that the contracted amount to be remtted to the councls only represented a small fracton of the revenues actually collected by the agent. Ths could be due to corrupt deals between councl staff and the prvate agents, but also due to weak routnes for revenue assessments on a regular bass.

Furthermore, the potental ‘profits’ connected wth outsourcng make the contracts vulnerable to corrupt arrangements between members of the tenderng board and prvate entrepreneurs.

Political interference

Representatves from the councl management teams n all the councls dentfied less poltcal nterferences n the day-to-day revenue tax collectons as a major benefit of outsourcng. However, accordng to some prvate agents ntervewed, outsourced revenue collecton has been actvely ressted by ndvdual councllors n some locatons.

what’s the Council’s share? assessing the revenue base in selected Councils

What percentage of the revenues collected s remtted to the councl? What allowances are made for the prvate collectors’ profit margn? These questons are mportant for examnng the sustanablty of outsourced revenue collecton systems. Ths study focuses on the experences wth some of the

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commonly outsourced local government revenue sources n recent years, .e. fees and lcenses, market fees and crop cesses. Lessons from these councls are shared by many other councls n Tanzana.

Dar es Salaam City Council

Dar es Salaam’s two man revenue sources under prvate collectors are fees for vehcles and passengers at the Ubungo Bus Termnal (UBT) and parkng fees n the cty centre. Approxmately 90% of the UBT revenues are now collected by a prvate agent, but based on the councl’s own assessment of the revenue base n 2002 and the evdence collected from ths study, t s clear that the agent retans the majorty share of the revenues collected at the UBT. A conservatve revenue assessment ndcates that the Cty Councl receves only 44% of the revenue collected from entry fees, wth the remanng 56% retaned by the agent. When takng nto account the peak traffic perods the share of the collected revenues retaned by the agent s most lkely substantally hgher. Moreover, the Cty Councl has sgned a five year contract wth the agent wthout any provson for annual adjustments of the nomnal amount of revenue to be submtted to the councl n order to reflect changes n the consumer prce ndex and ncreased busness actvtes at the termnal. Ths mples that the real value of the money remtted to the councl wll decrease over tme.

Mwanza City Council

Currently, one thrd (33%) of Mwanza Cty Councl’s own revenues are collected by 16 prvate firms, ndvduals, and market assocatons, and on average, 32% of the offically reported revenues collected are retaned by the agent. Agan, ths s a hgh margn, even after takng nto account the collecton costs. Moreover, t s lkely that the offical data understate the actual margns, snce the revenue potental reflected n the contracts generally seems to be underestmated, as observed n other councls.

Moshi District Council

Coffee cess s an mportant revenue source for Mosh DC, accounted for 28% of total tax revenues from agrcultural products n the 2005/06 fiscal year. The Klmanjaro Natve Cooperatve Unon (KNCU) collects the majorty of cess on behalf of the councl, and s supposed to pay ths n four annual nstalments to the councl. However, there are tmes when KNCU s a debtor of the councl at the year end. There s no well defined mechansm to crosscheck whether the amount presented by KNCU reflects the actual purchases from prmary cooperatves and what s actually sold to the Tanzana Coffee Board (TCB).

Conclusions and Policy implications

Outsourcng offers no ‘quck-fix’ ether to ncrease local government revenue, or to reduce tax admnstraton problems n local government authortes. In some councls outsourcng has ncreased collectons and made revenue flows more predctable, whle other councls have experenced substantal problems wth corrupton. In several contracts examned durng ths study prvate agents have secured exceptonally hgh profit margns at the expense of accomplshng a reasonable revenue return to the local government authorty. However, when approprately managed and montored, outsourced revenue collecton may establsh a foundaton for more effectve and efficent local government revenue admnstraton.

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The accurate assessment of the actual revenue potental s a major challenge facng local government authortes when mplementng ths system of prvatsed revenue collecton. Currently, assessments are conducted on an ad hoc bass, often based on the prevous year’s reported collecton. In many cases the assessment reflected n the contracts are outdated and do not reflect changes over tme n the revenue base. Moreover, the contracts often refer to nomnal amounts n TSh, whch are not adjusted upwards (or downwards, f requred) n accordance wth the general economc actvty level, nflaton etc. Underestmaton of the revenue potental mples that the actual collecton by the agent may be consderably hgher than what s reflected n the contract and pad to the councl.

There s an urgent need to put n place a system for more realstc assessment of the revenue potental before outsourcng. An effectve soluton could be to establsh an ndependent body responsble for conductng such revenue assessments. A proper assessment of the revenue potental would also provde an mportant check aganst the potental for corrupton n the tender process for outsourcng revenue collecton.

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1 inTroduCTion

Among the most urgent challenges for the ongong decentralsaton reforms n Tanzana s to find approprate revenue sources and tax enforcement methods for local government authortes. In recent years a number of local government authortes have reformed ther tax collecton systems n order to ncrease revenue. Dfferent measures have been mplemented, ncludng outsourcng of revenue collecton to prvate agents, whch s currently beng mplemented n an ncreasng number of councls. They nclude prvate collecton of property taxes n urban councls; market fees n both rural and urban councls; forestry leves (untl 2005) manly n rural councls; crop cess on certan agrcultural products n rural councls; and bus stand and parkng fees n urban councls.

Dependng on how they are mplemented, the tenderng systems for collectng taxes, fees and charges could potentally be a successful strategy for mprovng revenue collecton.¹ To meet ts objectves the system of prvate revenue collecton needs to ensure that prvate contractors accomplsh a reasonable return on the resources deployed. Prvate collecton may also result n lower costs and more effectve revenue collecton over a system whch utlses local government employees for the same purpose.² However, the potental profits connected wth such contracts make them vulnerable for corrupt arrangements between members of the tenderng board and busness people.³ Thus, t s mportant to ensure that the tenderng process s compettve and far, and the contracts transparent.

Whether ths s the case n local government authortes n Tanzana forms an mportant part of the motvaton of ths emprcal nqury.

The purpose of ths study s to examne recent experences wth outsourcng of revenue collecton n local governments n Tanzana. The research s guded by the followng questons:

(1) What are the major constrants and opportuntes facng prvate collecton of local government revenues?

(2) What allowances are made for the prvate collectors’ profit margn?

Much of what s currently known about the workng of dfferent systems of outsourced revenue collecton results from anecdotal evdence rather than systematc nvestgaton. In partcular, lttle s known about how effectve prvatsed collecton schemes are to enhancng revenues n ways that secure the legtmacy of the publc sector. The valdty of the revenue assessment, whch forms the bass for the contract between the prvate collector and the local government, s especally mportant.

Yet, lttle emprcal research has been carred out on ths subject n Afrca.⁴ Ths study comples more systematc evdence on these matters than has htherto been avalable.

Seven local government authortes were selected for n depth study. These are: Dar es Salaam and Mwanza Cty Councls, Ilala and Knondon Muncpal Councls, and the three rural councls Klosa, Ksarawe and Mosh. The emprcal study s based on prmary and secondary data from the selected councls, and combnes dfferent methods for data collecton. Whle nformaton on tenderng practces were obtaned from local government secondary data sources, we also ntervewed key nformants n local government admnstratons, exstng and former tender holders and other nterested partes, as well as taxpayers n the case councls. The emprcal assessment of revenue yelds was based on field research at the Ubungo Upcountry Bus Termnal n Dar es Salaam, markets of dfferent szes and structures n Mwanza, and coffee cooperatves n Mosh DC. The data collecton for assessng the

1 Prvate or outsourced tax collecton s commonly referred to as ‘tax farmng’ n the lterature (Kser and Baker 1994;

Webber and Wldavsky 1986).

2 Kser and Baker 1994

3 Bardhan and Mookherjee 2000; Iversen et al 2006

4 Excerptons are Iversen et al (2006), focusng on prvate collecton of market fees n Uganda and Kobb (1999, 2001) studyng market fee collecton n Tanzana.

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revenue potental for selected tax bases took place n July, August and September 2006. It ncluded ntervews wth current and prevous revenue collectors, mappng of actvtes at the bus termnal, censuses of market vendors and of transactons n key commodtes such as vegetables, clothng , and so on. Ths was followed up n 2007 wth ntervews wth key stakeholders n Dar es Salaam CC, Ilala MC and Knondon MC (July), Mosh DC and Mwanza CC (August).

The paper s organsed as follows. Secton 2 revews the hstorcal and theoretcal perspectves on prvate revenue collecton. The theoretcal lterature revewed provdes predctons about the dvson of labour between bureaucratc and prvate collecton drven by underlyng nformatonal asymmetres. In Secton 3, key features and ratonales of outsourced revenue collecton n the selected urban and rural councls are presented. The tenderng process, ncludng the formal crtera that are n place for selectng the wnner among the bdders, s also examned. Major economc, poltcal and admnstratve benefits and constrants facng the outsourced system of revenue collecton are examned n Secton 4. An assessment of the actual revenue potentals for selected revenue bases s carred out n Secton 5. Secton 6 dscusses polcy mplcatons and provdes conclusons based on the research findngs.

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2 HisToriCal and THeoreTiCal PersPeCTives of ouTsourCed revenue ColleCTion

Prvate or outsourced revenue collecton, often referred to as ‘tax farmng’ n the lterature, s understood as a system wheren ‘the right to collect certain taxes owed the state is auctioned off to the highest bidder’

(Stella 1993: 217). Tax farmng was practsed n Mesopotama around 1750 B.C., n England from the late Tudor perod untl the Cvl War, by the Mughals n northern Inda n the early eghteenth century and by France, Chna, Russa and Span at other hstorcal junctures. Whle tax farmng’s popularty typcally faded wth tme and modernsaton, ts trajectory and ultmate demse was rarely lnear and often nvolved swtchng between bureaucratc and prvate systems of collecton.⁵ The typcal dvson of labour was to outsource collecton of ndrect taxes, whle government bureaucrats retaned control over the collecton of drect taxes.

Ths underpns the clam that prncpal-agent (or contract) theory provdes a promsng analytcal and conceptual framework to study tax collecton systems.⁶ Indeed, contractual perspectves llustrate the two core problems n bureaucratc collecton, namely corrupton at collecton pont and the scope for ascertanng the tax base of actvty-senstve taxes.⁷ Usng a prncpal-agent approach to the relatonshp between the prncpal, tha s, the local government authorty, and the collecton agent, the prncpal’s challenge s to desgn a mechansm (contract) that reconcles the conflcts of nterest between the two partes. In local tax collecton, the contractual choce may be nterpreted as a functon of the control or montorng capacty of local government admnstratons, wth () bureaucratc, () ntermedate, and () full-fledged tax farmng as the man contractual alternatves.

Contractual shfts would then result from a change n the underlyng montorng problem.

Uncertanty about the sze of the revenue base s a key aspect of the montorng problem. For example, a stable revenue base reduces the dfficulty of the montorng problem and enables the prncpal to more accurately predct revenue flows. Ths makes the verficaton of the performance of a government-employed revenue collector easer. Many tax bases n poor countres are, however, dstnctly senstve to economc fluctuatons. Ths apples, n partcular, to agrcultural based revenue bases where the prncpal wll need to dstngush (a) poor performance by the bureaucrat from (b) colluson and corrupton between bureaucrat and taxpayers, and (c) a poor collecton result due to a local recesson. It follows that prvate contractors (tax farmers) not only have a greater personal stake n controllng the collectors, but also wll be better placed wth to penalse underperformng collectors. Government jobs n Tanzana are usually permanent and frequently provde nsufficent performance-related ncentves. The latter provdes the key arguments for outsourcng the collecton of market fees and other actvty senstve taxes.

5 Kser 1994; Kser and Kane 2006

6 Iversen et al 2006

7 Azabou and Nugent 1988; Toma and Toma 1993

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3 feaTures of revenue ouTsourCing in THe Case CounCils

In ths secton the key features of and ratonales for outsourced revenue collecton n the selected urban and rural case councls are examned. The secton starts out wth a descrpton of revenue sources whch have been outsourced n varous councls, followed by a dscusson of the characterstcs of the nvolved prvate agents. The tenderng process, ncludng the formal crtera that are n place for selectng the wnner s also examned.

3.1 revenues sources

Snce 2000, an ncreasng number of local authortes n Tanzana have adopted prvate tenderng systems for the collecton of dfferent types of taxes (Table 1). They nclude: outsourced collecton of property taxes n some urban councls such as n Ilala and Knondon Muncpal Councls and Mwanza Cty Councl; market fees n both rural and urban councls; forestry leves (untl 2005) manly n rural councls such as Klosa and Ksarawe; cess on certan agrcultural products n rural councls; and bus stand and parkng fees.

Table 1: Private revenue Collection in the Case Councils

revenue bases outsourced

dar es salaam

CC ilala mC kinondoni

mC mwanza

CC kilosa

dC kisarawe

dC moshi

dC Property tax (flat

rate)^* X X X

Market fees X X X X X X

Forestry leves

(untl 2005) X X

Agrcultural cess X^** X^***

Lvestock aucton

& abattor fees X

Bus stand fees X X X X

Parkng fees X X X

Publc tolets X X X

Sold waste

management X X X

Key:

* Currently, the councls’ own staff usually collects property taxes from the valued roll (valued property), and, generally from large property owners.

** Except from cashew nuts

*** Coffee cess

Source: Compled by the authors based on nformaton from the councls’ finance departments.

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Mwanza Cty Councl poneered the outsourcng of revenue collecton n Tanzana as early as 1996 n response to complants from ctzens about the councl’s revenue collectors, and that the money collected dd not benefit the people. Moreover, accordng to councl staff ntervewed, councllors often ntervened n the revenue collecton process and also n the recrutment of revenue collectors.

Corrupton was also perceved to be a problem at collecton ponts. Three arguments n favour of outsourcng were rased. Frst, t was assumed that a prvate firm would be able to more easly fire non-performng or corrupt staff than, what was the case for the local authorty. Secondly, t was argued that the problem of poltcal nterference n the tax collecton process and n the recrutment of revenue collectors would dsappear by outsourcng.⁸ Fnally, the councl expected that outsourcng would lead to a more predctable revenue stream for the councl and lower the admnstratve costs by shftng the costs of collecton to the prvate agent(s).

3.2 revenue Collection agents

Revenue collecton s outsourced to a range of dfferent types of agents wthn and across the councls studed (Table 2). For example, n Knondon MC the collecton of property taxes n certan areas were collected by a prvate consultancy firm specalsed n provdng tax advce to the prvate sector n the perod 2004-2005, whereas n Klosa and Ksarawe the collecton of forest leves (untl they were abolshed n 2005) was done by a firm prncpally engaged n the operaton of prvate schools. For market dues, collecton s manly outsourced to market assocatons and co-operatves operatng n the respectve markets. In Mwanza, for nstance, the collecton of fish market fees s outsourced to a fish dealers’ organsaton, and the collecton of fees at the central market s contracted to a vegetable cooperatve operatng at the market.

8 Poltcal nterventons n the tax collecton processes have been common n local government authortes (see Fjeldstad, 2001; and Fjeldstad and Semboja 2000).

Features of Revenue Outsourcing in the Case Councils

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examples of outsourced revenues and agents in selected Case Councils Type of revenue outsourcedyear of outsourcingagent(s)ContractContract amount to be submitted to the council Per month, in Tshs CBus stand fees (Ubungo Bus Termnal)2004Smart Holdng Ltd.

5 year contract from 1st November 2004 to 31st October 2009. A fixed amount whch s the same for the whole perod s to be submtted to the councl, regardless of any new ventures and busness expansons at the bus termnal.

54,052,674 Parkng fees2003M.P. Envronment Co. Ltd.

12 year contract from 1st September 2003 to 31st August 2015. A fixed amount whch remans the same over the whole perod s to be submtted to the councl.

50,500,000 Property taxTAPSE90% of the collecton s retaned by the agent. The contract has been termnated. Market feesMarket Assocaton Coop Socety (ILAMACO) MCProperty tax2004M/S IMMMA Consultng Servces Ltd

2 year contract (2004-2005). The firm collected property tax and debts n three wards*80% of collecton 2004M/S Professonal Centre

2 year contract (2004-2005). The firm collected property tax and debts n two wards.80% of collecton 2004M/S Fosters Auctoneer and Debt Collecton 2 year contract (2004-2005). The firm collected property tax and debts n three wards.80% of collecton

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CouncilType of revenue outsourcedyear of outsourcingagent(s)ContractContract amount to be submitted to the council Per month, in Tshs 2004M/S M&R Agency Ltd 2 year contract (2004-2005). The firm collected property tax and debts n three wards.80% of collecton 2004M/S Majembe Aucton Mart Ltd

2 year contract (2004-2005). The firm collected property tax and debts n three wards.80% of collecton 2004M/S DEZO Ltd 2 year contract (2004-2005). The firm collected property tax and debts n three wards.80% of collecton 2004M/S Yono Aucton Mart Company Ltd

2 year contract (2004-2005). The firm collected property tax and debts n three wards.80% of collecton Mwanza CCProperty taxOKWAMA EnterprsesAccordng to contract, the agent shall submt 85% of the collecton to the councl Lvestock aucton & abattor feesMbatama Holdngs765,000 Ksarawe DCForestry leves2003Mutembe Holdng2 year contract (2003-2005)

Frst year: Tshs. 9,000,000 to the DC Second year: Tsh s.10,000,000 to the DC Key: * Ward: an admnstratve level and consttuency n a councl. Source: Compled by the authors based on nformaton from the councls’ finance departments.

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3.3 The Tendering Process

Outsourcng of revenue collecton s usually an open tender process based on gudelnes provded by the Local Government Reform Programme (June 2003) and the Public Procurement Act No 21 of 2004. Before floatng a tender, the councl often conducts an assessment to determne the revenue potental and the tender bds are expected to be wthn the councl’s revenue estmates.⁹ The applcant s also requred to show a bank guarantee or an asset as securty. Ths measure ams to ensure that the councl’s revenues are not lost f the contractor defaults. To further mnmse the losses f the contractor defaults, some councls have nstalled a system whereby the contractor has to submt revenues to the councl n small nstalments, most commonly on a weekly or fortnght bass, but n some cases also daly, whch s the case for bus stand fees at the Ubungo Bus Termnal n Dar es Salaam Cty Councl.

Normally, ths frequency and proporton or amount s specfied n the contract.

The bddng process generally has sx steps n accordance wth the Public Procurement Act 2004:

1. Advertse n news newspapers.

2. Applcants submt ther applcaton to the councl through the tender box.

3. When the deadlne s over the applcatons are opened n publc, wth all applcants nvted to attend the openng.

4. The councl evaluates the applcatons.

5. Selecton of the wnner by the councl’s tender board.

6. Advertse the wnner and nform those who have lost the tender.

The Tender Board, s, n accordance wth the Publc Procurement Act 2004, composed of:

Char (apponted by councl drector, normally s the head of department).

Procurement (or Supples) Officer (secretary).

Councl Treasurer (member).

Admnstratve Officer (member).

2 members apponted by the Char (e.g. the Councl’s Legal Officer and the Dstrct Manpower Management Officer).

Co-opted members lke the head of the department responsble for the specfic tender (non-permanent member).

Prevously, elected councllors were members of the tender board; however ths was changed n the new Act of 2004.

The crtera for wnnng a contract may dffer n detal between local government authortes. But, generally, the bdder must fulfil the followng condtons:

The bdder must submt a detaled tender.

The bdder s requred to have a Tanzanan ctzenshp, or be a regstered Tanzanan organsaton.

A bd may be submtted by ndvduals, firms, a co-operatves, vllage governments, and others.

Some councls requre that the bdder be a resdent from ther councl.

•

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The bdder must have a ‘known past hstory’ (deally experence from revenue collecton, and no record of court cases aganst hm/her).

The bdder s requred to present bank statements and bank guarantee and/or a securty of an mmovable asset.

The bd should fall wthn the councl’s assessed revenue estmates.

The contract often specfies that the agent shall meet all admnstratve and operatonal costs, ncludng statonary expenses, transport, payment of salares to the revenue collectors, as well as other costs ncurred durng the executon of the servces. Further, the agent s responsble for keepng and mantanng proper records and books of accounts n respect of revenue collected. In some cases, the contract specfies that the agent shall furnsh the councl wth monthly financal and operatonal reports. The councl s enttled to nspect books and records of accounts, although ths ‘rght’ s not enforced by some councls.

If any dspute arses between the agent and the councl wth regard to ther respectve rghts, dutes or oblgatons connected wth the agreement, the contract normally states that such dfferences first shall be subject to ‘amcable resoluton’ by the partes. In the event that the partes are unable to reach an amcable resoluton, the dspute shall be finally settled n accordance wth the Arbtraton Ordnance (Cap. 15) of 1931. In a number of cases, councls have termnated the contracts n accordance wth the Arbitration Ordinance, for example Mwanza and Knondon termnated ther outsourced revenue collecton contracts for property tax collecton.

•

Features of Revenue Outsourcing in the Case Councils

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4 benefiTs and CosTs of ouTsourCing: exPerienCes from THe Case CounCils

What are the major economc, nsttutonal and poltcal benefits and constrants facng outsourcng of revenue collecton? What s the actual revenue potental of specfic tax bases, compared wth the remttance levels specfied n the contracts between the councls studed and ther prvate agents?

These questons are examned n ths secton.

4.1 revenue enhancement and Predictability

The contract normally specfies the amount of money n Tanzanan Shllngs whch the agent shall remt to the councl on a daly, weekly, monthly, and n some cases annual bass. For the councls, ths facltates more predctable budgetng and plannng, provded that the agents comply wth the contracts. Collecton by the councl tself often mpled substantal and unpredctable fluctuatons n revenues due to, for nstance, external shocks n the form of unfavourable weather condtons (droughts or floods), economc recessons, and changes n natonal tax polces such as the abolton of certan revenue sources. Ths does not mply that the prvate revenue collectors are not exposed to shocks, but they can, n prncple, ncorporate such uncertantes nto the contracts va the agreed amount they are to submt to the councl.

The proporton of revenues from outsourced bases as a share of the total revenue collecton from the councl’s own sources dffer across the case councls. In Mwanza CC, for nstance, the share n fiscal year 2004/05 was around 40%, compared to more than 60% n Dar es Salaam CC, and approxmately 10% n Ilala MC and Klosa DC (see Fgure 1).

figure 1: share of outsourced revenue bases as a Percentage of all bases 80

70 60 50 40

1996 30 20 10

0 199 1998 1999 2000 2001 2002 2003 2004J 2004/05

Ilala MC Mwanza CC DCC Klosa DC Percentage

Years

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Fgures 2a and 2b present the growth rates of revenues from outsourced and non-outsourced revenue bases n Mwanza CC (1996-2005) and Klosa DC (1999-2005) respectvely. Fgure 2a shows that revenues from both outsourced and sources collected by Mwanza CC have experenced very smlar growth rates durng the perod 1996-2005. In contrast Klosa DC experenced a dramatc growth n revenues from outsourced bases from 1999-2000, followed by a drop durng 2000-2001 (Fgure 2b).

Thereafter, the growth n revenues from the two modes of collecton followed a smlar trend. Two mportant questons for further examnaton emerge from the trends reflected n the figures above.

Frst, what s the revenue performance of outsourced bases compared to revenues collected by the case councls? Secondly, what s the cost effectveness of the two modes of revenue collecton?

figure 2a: mwanza - annual growth rates from outsourced versus non-outsourced revenue bases

1996 1997 1998 1999 2000 2001 2002 2003 2004J 2004/05

Total from outsourced bases Total from bases not outsourced 150

100

50

00

-50

-100 Percentage

Years

figure 2b: kilosa - annual growth rates from outsourced versus non-outsourced revenue bases

Percentage 200

100 50 00 -50 -100 150

1999 2000 2001 2002 2003 2004 2204/05

Years

2205/06

Outsourced bases

Non outsourced bases

Accordng to those councl officals ntervewed, outsourcng yelds more revenue compared to what the councl managed to collect from the same sources. However, the data n figures 2a and 2b above suggest that there are margnal dfferences n revenue collecton from collected by prvate agents and those collected by the councl. How can ths be explaned? Two nterrelated factors are lkely to mpact upon revenue collecton. The first explanaton s that the revenue bases whch are outsourced are those whch are consdered by the councls to be most problematc and/or costly Benefits and Costs of Outsourcing: Experiences from the Case Councils

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to collect. Some of the challenges facng the enforcement of ‘problematc’ sources mght be more effectvely handled by prvate contractors. Hence, the revenue yelds from these taxes are expected to ncrease. Secondly, by leavng the ‘problematc’ sources to prvate contractors, the councl may concentrate ts enforcement on the remanng sources, and the yelds from these are therefore lkely to ncrease too. Further, yelds from both outsourced sources and those collected by the councls are dependent on the economc envronment. Thus, fluctuatons n economc actvtes due to external shocks such as falure of ranfall for agrculture, nterest rate changes, access to credt and, changes n economc polcy, are lkely to have cross-cuttng mpacts on the varous revenue sources.

4.2 Cost effectiveness

Prvate collecton generally mples lower admnstratve costs for local government authortes, snce the costs of collecton are shfted onto the prvate sector rather than utlsng government employees for the same purpose. Some revenue sources are seasonal, for nstance taxes on many agrcultural products. Thus, nputs requred for revenue collecton also fluctuate. However, councl staff are employed on a permanent bass and labour costs are fixed throughout the year, ndependent of fluctuatng needs for nputs. In contrast, a prvate agent or a market assocaton has much more ablty to be flexble n labour requrements, and thus reduce the operatonal costs of revenue collecton. For example, the company contracted by Mwanza CC to collect fees n Mwalon Fsh Market engages up to 25 collectors durng the peak season, and reduces the number of collectors to 10 people durng low season.¹⁰ The agent at Ubongo Bus Termnal (UBT) n Dar es Salaam Cty Councl uses staff overtme to handle peak perods. Entrance gates are staffed from 5am to 10pm. Normally, staff work five days a week, however, durng peak perods staff may work seven days a week.¹¹

4.3 reallocation of Council staff

Accordng to representatves from the councl management teams ntervewed as part of ths study, the reallocaton of staff and less poltcal nterventons n the day-to-day operatons of tax collecton are the major benefits of outsourcng. Before outsourcng, the councl treasury staff spent a substantal share of ther tme on tax collecton. After outsourcng, councl staff could be released to other and more pressng responsbltes wthn the councl.

4.4 monitoring Private agents

In the ntal phase of outsourcng, agents for some case councls dd not comply wth ther contracts, ether by not submttng revenues collected, or by submttng less money to the councl than stpulated n the contract. In Knondon MC and Mwanza CC these problems were partly due to the agents’ lack of experence, reflected n overambtous bds, and partly because the agents n some places dd not pay ther own collectors properly, thus reducng ther ncentves to collect. Some councls also experenced agents embezzlng and dsappearng wth the revenues collected.

In some cases, the councls brought the defaultng agents to court. However, ths proved to be a costly and tme consumng exercse. An addtonal problem, experenced partcularly wth property tax collecton, was that agents targeted only the most accessble taxpayers to mnmse ther transacton costs. As a consequence, outsourcng dd not contrbute to expandng the revenue base as ntended.

For some councls, e.g. n Knondon MC, ths led to complants from the taxpayers who were

10 Personal ntervew wth Market Master by the authors (Mwanza, August 2007).

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sngled out for taxaton. Therefore, the tenderng process and contracts were revsed to ncorporate mechansms to reduce the rsk of default, ncludng measures to strengthenng montorng of the agents. Generally, the bdders are now requred to provde a bank statement and a bank guarantee or mmovable assets as securty. To avod substantal losses by default or embezzlement, the agent must submt revenues to the councl frequently and often small nstalments. Mwanza CC also plans to nsttutonalse a system whereby the contractors have to pay a monthly submsson n advance of collecton. Furthermore, the contracts are usually lmted to a shorter perod of tme, often one year.

However, an agent can apply for a renewal of the contract on a compettve bass.

4.5 Corruption

The potental profits connected wth such contracts make them vulnerable to corrupt arrangements between members of the tenderng board and prvate entrepreneurs. For example, n Aprl 2006, a case of dubous tender deals for revenue collecton and sold waste management was exposed n Dodoma Muncpalty. The case nvolved senor councl officers, ncludng the muncpal drector and the treasurer, and led to substantal financals losses for the muncpalty (see Guardian 4 Aprl 2006;

Daily News 4 Aprl 2006; Citizen 6 Aprl 2006). Experences from other countres, e.g. from neghbourng Uganda, also show that ths s a problem that may serously undermne the credblty and workng of the outsourcng system.¹²

The capacty of the local government revenue admnstraton to accurately assess the actual local revenue base s essental to mnmsng corrupton. Generally, assessng the revenue potental from market fees, lcenses and crop cess s often easy to conduct and does not requre many resources. As part of revenue enhancement efforts by the Local Government Reform Programme, (LGRP), councllors and staff are beng asssted wth assessng the potental revenue from ndvdual sources. However, the assessment of revenue potental s stll poor n many councls. In several cases examned as part of ths study we found that the contracted amount to be remtted to the councl only represented a small fracton of the revenues actually collected by the agent (See Section 5). Underestmaton of the revenue potental mples that the actual collecton by the prvate agent may be consderably hgher than what s reflected n the contract. Ths mght be due to corrupt deals between councl staff and the prvate agents, but also could be due to weak councl procedures for conductng revenue assessments on a regular bass.

4.6 Political interference

Representatves from the councl management teams of all the councls vsted as part of ths study referred to less poltcal nterventons n the day-to-day operatons of the tax collectons as a major benefit of outsourcng. However, some councls, ncludng Knondon MC and Mwanza CC, have experenced outsourcng beng obstructed by staff and local councllors due to lost rent-seekng opportuntes. In Knondon MC some ward executve officers and ward councllors ressted supplyng the prvate agents wth the data and nformaton requred to collect property tax.

Accordng to some prvate agents ntervewed, revenue collecton was actvely ressted by ndvdual councllors n some locatons. Some councllors were reported to have advsed ctzens not to pay taxes to prvate agents.¹³ Poltcal nterferences n day-to-day operatons were reported to be the man reason why elected councllors were removed from the councl tender boards n 2003, when the Local Government Procurement Regulations and the Local Government Procurement Manual were revsed n 2003.

12 Iversen et al 2006

13 Ths s also reported n prevous studes on local government taxaton n Tanzana. See, for nstance, Fjeldstad 2001; and Fjeldstad and Semboja 2001.

Benefits and Costs of Outsourcing: Experiences from the Case Councils

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5 wHaT’s THe CounCil’s sHare? assessing THe revenue base of THe CounCils in seleCTed Case CounCils

How much of the revenues collected are remtted to the councl? What allowances are made for the prvate collectors’ profit margn? These questons are mportant for examnng the sustanablty of the prvate collecton systems. Ths secton focuses on some of the revenue sources most commonly outsourced by local government authortes n recent years, such as fees and lcenses, market fees and crop cesses. The case studes presented are Dar es Salaam CC (for fees and lcenses), Mwanza CC (market fees), and Mosh DC (crop cess). Lessons from these councls are shared by many other councls n Tanzana.

5.1 dar es salaam City Council

In Dar es Salaam CC the two man revenue sources currently collected by prvate collectors are fees for vehcles and passengers at the Ubungo Bus Termnal (UBT) and fees from parkng vehcles n the cty centre. The collecton of parkng fees was assgned to prvate firms from 1996, whle fees at the UBT were ntally collected by the councl. However, the collecton of UBT fees was outsourced n December 1999. The decson to outsource revenue collecton from the UBT was due to (a) respondng to government call to councls to outsource some of ther servces and/or tasks f t s effectve to do so; and (b) capacty constrants. The latter was observed due to the shortage of experenced staff to undertake revenue collecton. Ths was further exacerbated by unfathfulness on the sde of some staff nvolved n revenue collecton. The followng focuses on the councl’s experences of outsourcng revenue collecton at the UBT.

Around 90% of the revenues are currently collected by a prvate agent; ths ncludes entry fees and fees from bars, restaurants and other busnesses operatng at the termnal. The major revenue source s from the entry fees mposed on buses, cars and passengers. The Cty Councl stll collects some fees and rents from the UBT, .e. manly fees from a hotel and petrol staton located wthn the property.

The same company has been contracted as the collecton agent from the start; however, the contract perod has been changng over tme. Untl 2001 the contract perod was one year, thereafter t was expanded to three years untl 2005, and snce 2005 the contract perod s for five years untl 2009.

Currently the agent remts collectons on a weekly bass. The contracted amount s equvalent to Tsh.

1.5 mllon per day for entry fees, plus 80% of revenues collected from other sources.

In 2002, the Cty Councl estmated the daly average revenue potental from entry fees (from buses, trucks, taxs, prvate cars, overnght parkng and people enterng the termnal), to be Tsh. 3.1 mllon.

Accordng to the contract, the agent shall remt Tsh. 1.5 mllon per day, .e. the agent retans 52% of the expected collecton to cover expenses and profit. Ths nomnal amount to be remtted to the councl has remaned unchanged snce 2002.

In August 2006 REPOA’s research team made an ndependent assessment of the revenue potental at the UBT; ths was a straghtforward and smple exercse. A group of research assstants was located at the UBT over a one week perod countng the number and types of vehcles and people enterng the termnal, ncludng the number of cars parked overnght (see Table 3). Dfferent rates apply for dfferent szes of vehcles usng or accessng UBT facltes.¹⁴ Moreover, people escortng/recevng

14 No fees payment s made for government and donor funded programmes/projects vehcles as well as those

belongng to UBT workers. Also passengers wth ther tckets n hand do not pay entrace fee as they enter the termnal.

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passengers are charged dfferently from vehcles. The followng categores of fees were applcable at the UBT n 2006:

Large vehcles, ncludng bg buses, tankers and bg lorres are charged Tsh. 2,000 at the gate when leavng the termnal. Smlar vehcles are charged Tsh. 5,000 for parkng n the termnal overnght.

Medum szed vehcles, whch nclude mnbuses and small lorres, are charged Tsh. 1,000 at the gate when leavng the termnal and Tsh. 2,000 when parked n the termnal overnght.

Small cars, manly saloons and other prvate cars pckng/droppng passengers n the termnal pay Tsh. 300 at the gate when leavng. Such cars pay Tsh. 2,000 when parked n the termnal overnght.

Taxs operatng n UBT pay dependng on where they park; those parkng outsde the termnal pay Tsh. 1,500 per day and those parkng nsde the termnal pay Tsh. 2,000 per day.

People enterng the termnal are supposed to pay Tsh. 200.

Table 3 shows the number of vehcles and people elgble to payng fees at the termnal durng the perod 16-23 August 2006. Intervews wth key nformants ndcated that the traffic n some perods were much hgher than reflected n the table. For nstance, n December many people depart from Dar es Salaam for holdays n ther home-regon. In January people return to work or school. Lkewse, towards the end of May through July, there s much traffic due to the school terms. Moreover, the Dar es Salaam Trade Far has a bg mpact on traffic patterns n June/July.

Referrng to Table 3 and takng nto account the contracted daly remttance of Tsh. 1.5 mllon, a conservatve revenue assessment ndcates that the Cty Councl receves 44% of the revenues collected from entry fees. The remanng 56% s retaned by the agent. However, by takng nto account the peak perods, the share of the collected revenues retaned by the agent s most lkely to be substantally hgher.

Table 3: dar es salaam CC: assessment of the revenue Potential from ubungo bus Terminal (16-23 August 2006) *

day

vehicles departing

Through gate overnight

Parking Taxis Parking

People enter

Total revenue

big med sma big med sma ins. Tsh

ubT out.

ubT

1 307 129 2,382 146 52 70 57 34 5,678 3,063,500

2 234 135 2,904 141 32 78 58 36 6,080 3,242,500

3* 265 149 3,480 144 67 27 55 40 8,075 3,804,900

4 213 170 3,149 131 25 54 51 23 7,403 3,434,400

5 252 134 2,748 148 31 65 42 38 7,974 3,556,000

6* 218 137 3,190 121 48 76 64 37 6,535 3,357,800

7 256 181 2,590 137 42 65 52 29 7,136 3,320,000

Avge 249 148 2,920 138 42 62 54 34 6,983 3,397,014

Note: * The research assstants started collecton of data at 4 am.

•

What’s the Council’s Share? Assessing the Revenue Base of the Councils in this Case Study

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Key: Bg = bg vehcles

Med = medum szed vehcles Sma = small cars

Ins. UBT = Insde termnal Out. UBT = outsde of the termnal Avge = Average

Source: Assessed and compled by the REPOA researchers.

Based on the councl’s own assessment n 2002 and ths study’s more recent estmate, the lack of capacty n tax collecton has resulted n the agent retanng a larger proporton of the revenues collected at the UBT. Although the collecton costs are covered by the prvate agent, the margn s stll very hgh by Tanzanan standards and ths study found no ndcatons that ths hgh margn s due to hgh collecton costs. Moreover, the Cty Councl sgned a contract wth the agent for five - year perod wthout annual adjustments of the nomnal amount of money to be submtted to the councl n order to reflect changes n the consumer prce ndex and ncreased busness actvtes at the termnal. Ths mples that the real value of money remtted to the councl wll decrease over tme.

Furthermore, ntervews wth key nformants and data from the field research suggest the lack of transparency s one of the many loopholes that may result n loss of revenues, both for the contractor and the Dar es Salaam Cty Councl (DCC). For example, the agent’s guards at the gate receve nformal payments to allow people and vehcles to pass at a lower rate than the offical rate. Passengers can pay less than what they ought to pay provded that they do not request offical recepts. The same apples for the vehcles enterng and leavng the termnal, and for vehcles that are parked n the termnal overnght. Some DCC officals based at the UBT also collude wth prvate collectors to understate the revenue base and share the excesses. For example, durng fieldwork n August 2006 the researchers counted 135 workers from the Termnal Baggage Servce Company at the market, each wth a trolley carryng passengers’ baggage and other belongngs. However, accordng to the offical records from the Cty Councl, only 70 trolleys operate at the termnal and ths number s used as the bass for the contracted amount to be remtted to the Cty Councl from ths specfic source. Hence, almost 50%

of ths revenue base s not accounted for. Another example s the greasng machnes operatng at the termnal whch servce cars and buses for a fee. Revenues from ths source are not recorded n the councl’s offical revenue data; consequently, the DCC loses ths source of revenue.

5.2 mwanza City Council

Intally, Mwanza CC outsourced collecton of revenue from only two markets. An assessment of the revenue potental was carred out by a techncal task force apponted by the councl. The first tender for the Mwalon Fsh Market was won by a fish dealers’ assocaton. The tender for the Central Market was won by a vegetable co-operatve socety operatng at the market. Ths outsourcng resulted n a substantal ncrease n revenues from these two sources.¹⁵ In 1997 the councl then decded to outsource revenue collecton from other sources, however, accordng to the councl staff ntervewed, poor assessment of the revenue potental and poltcal nterventons n the tenderng process led to overambtous bds and the engagement of unqualfied agents. Consequently the cty councl receved less revenue from the prvate agents actng n some of the outsourced markets than the collectons made by the councl staff pror to outsourcng. Smlar problems were encountered wth the prvate collecton of property taxes from unsurveyed land. Outsourcng was therefore temporarly abolshed and substantal revsons of the tender evaluaton procedures and new measures for montorng of

15 Revenues from market fees ncreased from Tshs. 53.3 mllon n 1996 to Tshs. 176.9 mllon n 1997 (data provded by the Fnance Department, Mwanza CC). Whle these figures refer to revenues from all markets n Mwanza CC,

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agents were put n place. The outsourcng of revenue collecton n Mwanza, as well as by other local government authortes has been a ‘learnng-by-dong’ process, where ntal problems have been addressed on a tral and-error approach.

One thrd (33%) of Mwanza Cty Councl’s own revenues are collected by 16 prvate firms, ndvduals and market assocatons.¹⁶ On average, 32% of the offically reported revenues collected are retaned by the agent to cover costs and profits (Table 4). Ths s a hgh margn, even when takng nto account the collecton costs. Moreover, t s lkely that the offical data understates the actual margns, snce the revenue potental reflected n the contracts generally seems to be underestmated, as also observed n other councls. Consequently, t s not surprsng that there has been a substantal ncrease recently n the number of bdders for each contract.¹⁷

Table 4: mwanza CC revenues submitted and retained by Contractors, based on 2005/06 budget estimates, (n % of total collecton)

Contractor submitted to Council

% Total Collection retained by agent

% Total Collection

Beach Invest. Group 84 16

Buruzuga Prntng Works 60 40

Kayenze Beach Management 74 26

Klmahewa General Supply 60 40

Mwalon Fsh Dealers Assocaton 67 33

Mwanza Vegetable Supply Cooperatve 70 30

Steven Mwenge 66 34

Wadok SACCOS 64 36

average 68 32

Source: Mwanza CC, Treasurer’s office

5.3 moshi district Council

Coffee cess s an mportant revenue source for Mosh DC, durng the 2005/06 fiscal year t accounted for 28% of the total tax revenues from agrcultural products n the councl.¹⁸ The offical coffee cess rate s 5% of the farm gate prce. The councl collects the cess through three types of agents:

(1) The Klmanjaro Natve Cooperatve Unon (1984) Ltd (KNCU). The KNCU buys coffee from farmers through local prmary cooperatve socetes, later t sells the coffee to the Tanzana Coffee Board (TCB) at open aucton.

(2) Snce 1994 prvate buyers have been allowed to buy coffee from ndvdual farmers and, lke the KNCU, they subsequently sell the coffee to the TCB.

16 Based on 2005/06 budget estmates from Mwanza CC.

17 Personal ntervew wth the Chef Economst of Mwanza CC (August 2007, Fjeldstad, Katera and Ngalewa).

18 The bggest source of crop cess revenue n Mosh DC s sugar cane, whch accounted for 69% of crop cess revenue n fiscal year 2005/06.

What’s the Council’s Share? Assessing the Revenue Base of the Councils in this Case Study

Experiences from Local Authorities in Tanzania

Outsourcing Revenue Collection to Private Agents:

Experiences from Local Authorities in Tanzania

Odd-Helge Fjeldstad, Lucas Katera &

Erasto Ngalewa

R E P O A

R E P O A

RESEARCH ON POVERTY ALLEVIATION

Special Paper No. 09.28

Outsourcing Revenue Collection to Private Agents:

Experiences from Local Authorities in Tanzania

Table of ConTenTs

aCknowledgemenTs

absTraCT

exeCuTive summary

1 inTroduCTion

2 HisToriCal and THeoreTiCal PersPeCTives of ouTsourCed revenue ColleCTion

3 feaTures of revenue ouTsourCing in THe Case CounCils

4 benefiTs and CosTs of ouTsourCing: exPerienCes from THe Case CounCils

5 wHaT’s THe CounCil’s sHare? assessing THe revenue base of THe CounCils in seleCTed Case CounCils