This study focused on Tax administration and Revenue Generation in Tororo District Local Government. A case study of Magodesi Town Council. The objectives of the study include; to establishing the level of tax compliance among Ugandan. Tax payers to assess the performance of domestic revenue collection in Uganda and to establish the relationship between tax compliance and Domestic Revenue Collection. The findings of the study revealed that there is a strong positive relationship between tax compliance and Domestic revenue collection. Data was collected using selfadministered questionnaires. The study used stratified and purposive sampling techniques to draw representative samples and 40 respondents were involved in the study. The study undertook to find out the level of tax compliance and it was found out that compliance is still low among the tax payers and they attribute this to the high tax rates, tax payer’s attitude towards URA, the large informal sector which encourages tax evasion. The low level of tax compliance was also attributed to the low compliance culture. The study also found out that the cost of revenue collection is low, large tax payers office increased domestic revenue collection and whether URA-experiences and registers tax arrears which also affects its performance. The study also recommends the following tax administration, so as to provide individuals and groups with guidance on how to improve book keeping standards and tax returns, tax counseling offices should be established country wide, procedures for filling returns and applications. Tax education to create awareness among tax payers and awarding of prizes to compliant tax payers.