Analysing the Effectiveness of Hotel, Restaurant, and Advertising Taxes Revenue in Enhancing the Regional Original Revenue of DKI Jakarta Province

Abstract

This study analysis the effectiveness of Hotel Tax, Restaurant Tax, and Advertising Tax in enhancing the Regional Original Revenue (PAD) of DKI Jakarta Province. The study examines local tax revenues from the fiscal years 2020 to 2022, focusing on the constant growth of Restaurant and Advertising Taxes. It looks at how the regional government of DKI Jakarta has explored the potential of these local taxes through policies and regulations, resulting in a significant increase in local tax revenue. The study underlines that the annual increase in local tax revenue from Restaurant Tax, Hotel Tax, and Advertising Tax should not be the sole measure of success in harnessing their potential. The effectiveness of these local taxes serves as a gauge of how far the achievement target will be reached, with higher percentages indicating higher effectiveness. This study found that Hotel Tax, Restaurant Tax, and Advertising Tax have been highly effective in meeting the revenue targets set by the regional government, with effectiveness rates ranging from 99.1% to 108.7%. However, the contribution of these local taxes to the regional original revenue is categorized as very low, indicating variations in contribution amounts based on differences in tax rates. Despite the low contribution, the effectiveness of tax revenue in meeting targets remains high. To increase the regional original revenue, the focus should be on expanding the scope of local tax objects rather than setting excessively high targets, as optimizing the potential of local taxes is crucial for enhancing the regional original revenue of DKI Jakarta Province.