This research was aimed at the role of local revenue collection and service delivery in lower local government in Nansana Municipality Kampala. The study was based on three main objectives which were :- to find out the methods of revenue collection in Nansana Municipality Kampala, to find out how revenue collected has helped in service delivery in local governments and to find out the challenges faced in revenue collection in Nansana Municipality Kampala. The researcher obtained a letter of introduction from Bishop Stuart University research unit, which was presented to the officer in charge of Nansana Municipality Kampala. Local Government where the researcher’s case study was based. The researcher used both qualitative and quantitative research designs with a sample of 50 respondents who included the staff of Nansana Municipality Kampala. Local government. Qualitative data was obtained through questionnaires, interviews and observation while quantitative data was obtained through computation and analysis. The research findings showed the challenges faced by the District Local Government such as; political interference, tax evasion and tax avoidance, how revenue collection could be improved and how local revenue had a strong impact on service delivery in local governments. Using Pearson’s correlation of coefficient, it signified that revenue collection had a strong positive correlation with service delivery (r=0.42). The researcher concluded that local governments have challenges in revenue collection but such challenges were not beyond control. Basing on the findings the researcher concluded that revenue collection has a great impact on service delivery. This could be evidenced with poor service delivery with a decline local revenue collection and improved service delivery with a rise in revenue collection. However, the researchers recommended measures to improve on revenue collection like training tax collectors, sensitizing the masses. The researcher suggested that future studies should be conducted to analyze any other factors that affect revenue collection as well as service delivery in local governments.