Collectors, councillors and donors: Local government taxation and state-society relations in Tanzania

Recent debates on taxation and democratisation in poor countries argue that the more a state earns its income through the operation of a bureaucratic apparatus for tax collection, the more it needs to enter into reciprocal arrangements with citizens about provision of services and representation in exchange for tax contributions. In terms of local government taxation in Tanzania this assumption appears not to be valid. In contrast, this article concludes that revenue performance depends on the degree of coercion involved in tax enforcement. Reciprocity does not seem to be an inherent component of the state-society relationship in connection with local government taxation. Furthermore, the study demonstrates that the involvement of donors through arrangements which supply development aid on the basis of matching funds from the local government, may induce increased tax effort, however, at the expense of accountability, responsibility and democratic development.