CHAPTER 290
LOCAL GOVERNMENT FINANCES ACT

[PRINCIPAL LEGISLATION]

ARRANGEMENT OF SECTIONS

   Section

Title

PART I
PRELIMINARY PROVISIONS

   1.   Short title.

   2.   [Omitted.]

   3.   Application.

   4.   Interpretation.

PART II
FUNDS AND RESOURCES OF LOCAL GOVERNMENT AUTHORITIES

   5.   Vesting of assets and liabilities in local government authorities.

   6.   Sources of revenue of urban authorities.

   7.   Sources of revenue of district councils.

   8.   Sources of revenue of township authorities.

   9.   Sources of revenue of village councils

   10.   Power of the Minister.

   11.   Appointment of Local Government Licensing Authorities in respect of certain business, etc.

   12.   Grants to local government authorities.

   13.   Block grants to local government authorities.

   14.   Power to borrow.

   15.   Overdrafts.

PART III
MAKING AND COLLECTION OF RATES

   16.   Power to impose taxes and rates.

   17.   Duty to make sufficient rates.

   18.   Methods of rating.

   19.   Publication of rate.

   20.   Duty to pay rates.

   21.   Date and place of payment.

   22.   Exemption from and remission of rates.

   23.   Claim for amount of rate.

   24.   Penalty for failure to pay rates and for wilful misrepresentation.

   25.   Penalty for inciting a person to refuse to pay rate, etc.

   26.   Unauthorised collection of rates.

   27.   Duty to give information.

   28.   Refusal to give information.

   29.   Rate collectors.

   30.   Offences by rate collectors.

   31.   Appointment of agents.

   32.   Assessment committees.

   33.   Deduction of rates from wages of employees.

   34.   Rules relating to rates and rating.

   35.   Legal proceedings.

PART IV
MANAGEMENT OF FINANCE AND RESOURCES

   36.   Accounting officers.

   37.   Powers of the Minister.

   38.   Expenditure.

   39.   Reserve and special funds.

   40.   Advances and deposits.

   41.   Investment of funds.

   42.   Banking accounts.

   43.   Form of accounts.

   44.   Statements of accounts to be furnished.

   45.   Financial memoranda.

   46.   Estimates.

   47.   Access to records of local government authorities.

   48.   Audit of accounts.

   49.   Liability for payment of audit fees.

   50.   Power to take evidence.

   51.   Auditors' report.

   52.   Publication of accounts and audit report.

   53.   Power to sanction certain expenditure.

   54.   Power to surcharge.

PART V
LOCAL GOVERNMENT LOANS BOARD

   55.   Interpretation.

   56.   Establishment of Board.

   57.   Constitution and procedure.

   58.   Secretary to the Board.

   59.   Application of Local Government Service Act.

   60.   Functions of Board.

   61.   Directions by Minister.

   62.   Funds and resources of the Board.

   63.   Power to borrow.

   64.   Interest on deposits.

   65.   Accounts and audit.

PART VI
GENERAL PROVISIONS

   66.   Offences.

   67.   General penalties.

   68.   Regulations.

   69.   [Repeal of Act No. 8 of 1979.]

   70.   [Amendments.]

CHAPTER 290
THE LOCAL GOVERNMENT FINANCES ACT

An Act to make provision for sources of revenue and the management of funds and resources of local government authorities and for matters connected or incidental to securing the proper collection and sound management of finances in the local government system.

[14th March, 1983]
[G.Ns. Nos. 35 and 36 of 1983]

Acts Nos.
9 of 1982
18 of 1983
4 of 1985
17 of 1985
10 of 1986
4 of 1987
10 of 1987
18 of 1991
23 of 1991
6 of 1999
12 of 1999
4 of 2001
10 of 2002
G.N. No. 33 of 2001

PART I
PRELIMINARY PROVISIONS (ss 1-4)

1.   Short title

   This Act may be cited as the Local Government Finances Act.

2.   Omitted

   [Omitted.]

3.   Application

   This Act shall apply in respect of all local government authorities established under the Local Government (District Authorities) Act * and the Local Government (Urban Authorities) Act *.

4.   Interpretation Act No. 6 of 1999 s. 65">

   In this Act, unless the context requires otherwise–

   "the Act" means, in relation to a district authority, the Local Government (District Authorities) Act *, and in relation to an urban authority, the Local Government (Urban Authorities) Act *;

   "accounting officer" means any of the accounting officers appointed under section 36;

   "accounts" includes records relating to accounts;

   "auditor" means the person appointed by a local government authority, with the prior approval of the Minister, to audit the accounts of a local government authority in accordance with the provisions of Part IV and for the purposes of that Part and of section 47, includes any person duly authorised in that behalf by the auditor;

   "authority" means a local government authority;

   "block grant" means subvention whether conditional or unconditional granted to a local government authority by the central Government under section 13;

   "Board" means the Local Government Loans Board established by section 56;

   "Decentralisation Act" means the Decentralisation of Government Administration (Interim Provisions) Act *;

   "district authority" means a district council, a township authority or a village council;

   "district development council" means a council established pursuant to the provisions of the Decentralisation Act *;

   "equalisation grant" means subvention granted by the central government in agreement with the local government authorities to least developed local authorities meet the cost of services based on the degree to which a local government unit is lagging behind the national standard;

   "financial memoranda" means written instructions issued by the Minister under section 45 of this Act;

   "functions" includes powers and duties;

   "Government" means the Government of the United Republic;

   "local government authority" means a district authority or an urban authority;

   "Minister" means the Minister responsible for local government;

   "urban authority" means a town council, a municipal council or a city council;

   "Urban Councils Act" means the Urban Councils (Interim Provisions) Act *, repealed by the Act;

   "Villages Act" means the Villages and Ujamaa Villages (Registration, Designation and Administration) Act *, repealed by the Act.

PART II
FUNDS AND RESOURCES OF LOCAL GOVERNMENT AUTHORITIES (ss 5-15)

5.   Vesting of assets and liabilities in local government authorities

   (1) Notwithstanding the enactment of the Act and the repeal of the Urban Council Act, all assets and liabilities vested in any urban council immediately before, and subsisting on, the commencement of the Act and this Act shall, by virtue of this subsection and without further assurance, vest and continue to vest in and to be the property and liabilities, respectively, of the urban authority established or deemed to have been established under the Act in the area of the urban council concerned.

   (2) Upon the commencement of the Act and the establishment of a district council in the area previously of a District Development Council–

   (a)   all sums of money, roads, open places, lands, buildings, waterworks, bridges, pier, ferries, vehicles, goods and all other property of any kind vested in, belonging to, held by, or purported to belong to or be held by the District Development Council, or held by the Government for or on behalf of that District Development Council, shall, by virtue of this subsection and without further assurance, be transferred to and vest in a like interest in the district council in question;

   (b)   all the assets which were transferred to the Government from the former local authority by virtue of the provisions of the Decentralisation Act *, and which are subsisting immediately before the commencement of the Act shall, by virtue of this subsection and without further assurance, be transferred to and vest in the district council established under the Act in the area of the former local authority;

   (c)   subject to such directions as the Minister may, after consultation with the Minister responsible for finance, give in that behalf–

      (i)   all liabilities arising from a District Development Council in whose area a district council is established under the Act; and

      (ii)   all liabilities arising from or connected with the assets transferred to the Government from a former local authority by virtue of the provisions of the Decentralisation Act *, shall, by virtue of this subsection and without further assurance, be or remain vested in, and be settled by the Government.

   (3) Every instrument specified in subsection (4) as an instrument to which that subsection applies shall, upon the commencement of the Act and the establishment of a district council in the area previously of a District Development Council, by virtue of this section continue in full force and effect and the district council shall by this Act be–

   (a)   substituted for the District Development Council as a party to the instrument;

   (b)   entitled to receive, and enforce payment of any money payable under the instrument;

   (c)   entitled to obtain transfer, conveyance or assignment of, and enforce possession of any property which was or is to be transferred, conveyed or assigned under the instrument;

   (d)   liable to make payment of any money payable under the instrument, subject to this section;

   (e)   liable to transfer, convey or assign any property which was or is to be transferred, conveyed or assigned under the instrument, subject to this section, as the case may be.

   (4) This subsection applies to instruments, including contracts, guarantees, agreements bonds, authorities, mortgages, charges, bills of exchange, promissory notes, bank drafts, bank cheques, letters of credit, securities, certificates of title, share and stock certificates, warrants and other documents–

   (a)   to which a District Development Council was or is a party;

   (b)   to which the Government was or is a party as a trustee or guarantor for a District Development Council;

   (c)   creating or evidencing any right of a District Development Council to property; or under which any money was or is to be or may have or may become, liable to be transferred, conveyed or assigned by a District Development Council, which are subsisting on or after the commencement of the Act or come into existence after the establishment of a district council in the area previously of a District Development Council, and which relate to the assets transferred to or vested in a district council by virtue of this section.

   (5) Where the Minister in giving directions pursuant to paragraph (c) of subsection (2) of this section, transfers or vests liabilities or any part of the liabilities of a District Development Council or of the Government, to or in a district council, the district council shall have power to renegotiate the period for settlement of the liability or liabilities with the creditor or other person to whom the district council shall thereby become indebted.

   (6) Subject to such directions as the Minister may give in that behalf, a district council may transfer any portion of the assets vested in it by this section to any township authority or authorities within its area of jurisdiction.

   (7) Notwithstanding the enactment of the Act and the repeal of the Villages Act, all assets and liabilities vested in any village council immediately before, and subsisting on, the commencement of the Act and this Act shall continue to vest in and to be the property and liabilities, respectively, of the village council concerned.

   (8)    Where immediately before the commencement of this Act, any village council was–

   (a)   entitled to receive, and enforce payment of, any money;

   (b)   entitled to obtain transfer, conveyance or assignment of, and enforce possession of any property which was or is to be transferred, conveyed or assigned;

   (c)   liable to make payment of any money payable by it;

   (d)   liable to transfer, convey or assign any property which was or is to be transferred, conveyed or assigned, as the case may be,

under instrument or document of the nature of an instrument or document to which, mutatis mutandis, subsection (4) of this section applies and which is subsisting on or after, or comes into operation after the commencement of this Act, the instrument or document shall continue in full force and effect, and the rights and liabilities of the village council in question arising from the instrument or document concerned shall continue vesting in that village council, notwithstanding any other provisions of this Act to the contrary.

6.   Sources of revenue of urban authorities Acts Nos. 4 of 1999; 12 of 1999 s. 23">

   (1) The revenues, funds and resources of an urban authority shall consist of–

   (a)   all assets vested in the urban authority by virtue of section 5;

   (b)   all moneys derived from any trade, industry, works, services or other undertaking carried on or owned by the urban authority;

   (c)   all fees for licences granted within the area of the urban authority under the Auctioneers Act *;

   (d)   all moneys derived from the registration of taxi cabs and commuter buses plying within the area of the urban authority;

   (e)   all the fees for licences granted under the Business Licensing Act *, in respect of business premises for business other than businesses of a national or international character situated within the area of jurisdiction of an urban authority;

   (f)   such proportion as the Minister may, with the approval of the Minister responsible for finance, determine, of the revenue collected by the Government under the Road Traffic Act *, in respect of vehicles which are ordinarily housed or kept within the area of the urban authority, or such amount in lieu of that sum as the Minister may direct;

   (g)   all fees for licences granted within the area of the urban authority under the Intoxicating Liquors Act *;

   (h)   all fees for licences in respect of theatres or other places of public entertainment within the area of the urban authority, granted under the Films and Stage Plays Act *;

   (i)   all moneys derived from fees for licences, permits, dues or other charges payable pursuant to the provisions of any by-law made by the urban authority;

   (j)   all moneys derived from fines imposed by, or the value of all things and articles forfeited as a result of an order of any court in consequence of a contravention of any provision of the Act, this Act or any by-law of the urban authority in relation to markets, animals pounds or recreation halls within the area of the authority;

   (k)   all moneys derived from rents or fees collected for renting or use of public houses or buildings owned by the urban authority;

   (l)   all moneys derived from the urban development levy imposed by the urban authority pursuant to this Act;

   (m)   all moneys derived from fees paid in respect of rents of shop, butcheries, market stalls, user charges, service charges and entertainment taxes;

   (n)   all moneys realised from the sale or other disposition of things and articles of the urban authority;

   (o)   all moneys derived from rates;

   (p)   all moneys payable under the Entertainment Tax Act *, and collected within the boundaries of the urban area;

   (q)   all moneys payable under the Hotels Act *, by the proprietor of guest houses within the boundaries of the urban area.

   (r)   all the fees derived from meat inspection and abattoir use;

   (s)   twenty percent of all the moneys collected by the Central Government as land rent under the Land Act *;

   (t)   all moneys derived from any cess payable at source on any agricultural or other produce, produced in the area of the urban authority imposed under this Act or any other written law except major export crops whose produce cess shall not exceed five percent of the farm-gate price shall as well be payable at source;

   (u)   all monies derived from the service levy payable by corporate entities at the rate not exceeding 0.3 percent of the turnover net of the value added tax and the excise duty.

   (2) An urban authority may charge fees or dues in respect of services provided by it and, moneys derived from fees or dues chargeable in respect of those services, activities and programmes.

   (3) Any other moneys lawfully derived by an urban authority from any other source not expressly specified in subsection (1) or (2) shall be and form part of the revenues, funds and resources of the urban authority.

   (4) All revenues of an urban authority shall be paid into the general fund of the urban authority.

7.   Sources of revenue of district councils Act No. 12 of 1999 s. 24; G.N. No. 33 of 2001">

   (1) The revenues, funds and resources of a district council shall consist of–

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