Own-source Revenues Research Articles

Analysis of the Impact of Fiscal Decentralization on Per Capita GDRP Across Provinces in Indonesia

This study aims to investigate and analyze the impact of fiscal decentralization on per capita GRDP across provinces in Indonesia. Additionally, the research examines the influence of Regional Own-Source Revenue (PAD) on per capita GRDP across provinces in Indonesia, the effect of the General Allocation Fund (DAU) on per capita GRDP, the effect of Revenue Sharing Fund (DBH) on per capita GRDP, and the overall impact of the Specific Allocation Fund (DAK) on per capita GRDP, and the overall impact of fiscal decentralization on per capita GRDP. The study also seeks to analyze to combined effects of PAD, DAU, DBH and DAK on per capita GRDP across provinces in Indonesia. The data analysis technique employed in this research is panel data analysis. The data used are secondary data, which have been collected by data collection institutions and made available to the public. The data for this study were sourced from the Central Bureau of Statistics, the Directorate General of Fiscal Balance, Ministry of Finance of the Republic of Indonesia (DJPK Kemenkeu), as well as books, journals, and website relevant to this research. The variables include per capita GRDP, Regional Own-Source Revenue (PAD), the General Allocation Fund (DAU), the Revenue Sharing Fund (DBH), and the Spesific Allocation Fund (DAK). The result of the study indicate that during the administration of Susilo Bambang Yudhoyono (SBY), the variable PAD had no effect on per capita GRDP, the variable DBH had no effect on per capita GRDP, and the variable DAK also had no effect on per capita GRDP. Meanwhile, during the administration of Joko Widodo (Jokowi), DBH had no effect, and DAK similarly had no effect on per capita GRDP. Furthemore, the R-square value during SBY’s administration was 11,12%, which is higher compared to the 8,7% during Jokowi’s administration. This indicates that the role of PAD, DAU, DBH and DAK in influencing per capita GRDP was more pronounced during SBY’s administration. Keywords: GRDP, PAD DAU, DBH, DAK

Map to prosperity: Natural resource revenue sharing and infrastructure development in Indonesia

The well-being of society can be realized through meeting basic needs, one of which is providing public infrastructure. This study examines the role of Natural Resource Revenue Sharing Funds (DBH SDA) on government investment in infrastructure in 491 regencies/cities in Indonesia. The testing in this research uses panel data regression analysis. The results show that per capita DBH SDA in Indonesia during the study period of 2010–2012 has a significant and positive influence on government investment in infrastructure. The selection of this period is based on the consideration that a resources boom has occurred, where there is an increased global demand for natural resource commodities followed by an increase in commodity prices, thereby positively impacting revenue for countries or regions abundant in natural resources. Despite DBH SDA having a significant and positive influence, regional spending on infrastructure tends to be more influenced by central government transfers such as General Allocation Fund (DAU), Special Allocation Fund (DAK), and Local Own-source Revenue (PAD). It was found that government investment in infrastructure tends to be influenced by transfer funds, indicating that the role of the central government remains significant in determining the infrastructure expenditure of regencies/cities in Indonesia.

LOCAL FINANCES IN WESTERN BALKAN COUNTRIES: FOCUS ON OWN -SOURCE REVENUES AND CAPITAL INVESTMENTS

This study examines the fiscal dynamics of local governments’ finances in the Western Balkan countries, focusing on their own source revenues and capital investments, made from the municipalities. While spending for capital investment has increased in nominal terms, the share of municipal spending on capital investments has been downwardly unstable over the past 16 years. In addition to central government transfers, several significant factors contribute to the determination of municipal own-source revenues, including central and local public investment, current expenditures, and municipal development index. The study reveals that capital investment depends on its own source revenues or capital transfers from the central government, where local capital expenditure emerges as a robust determinant, exerting a stronger influence on municipal fiscal autonomy compared to central government investments. This finding underscores the importance of local capital expenditure in enhancing fiscal independence at the local level. This research emphasizes the need for a comprehensive understanding of investment allocation, development indicators, and promoting local revenue mobilization. The findings suggest that enhancing local fiscal autonomy requires a shift in policy focus towards stimulating local capital expenditure and prioritizing human development. By identifying the factors that influence municipal own-source revenues, this study provides valuable insights for local management in strengthening the financial capacities of local governments in the Western Balkan countries.

Intergovernmental Transfer and Local Own-Source Revenue on Capital Expenditure

During the reform era, regional autonomy has been implemented to develop each regency/city effectively and effi-ciently. The central government has delegated authority and given intergovernmental transfers to local governments to regulate and determine the priorities of their regional development. Unfortunately, the effectiveness of the trans-fer by increasing capital expenditure allocation often becomes controversial. In the recent 5 years, the percentage of capital expenditure realization is lower than that of the capital expenditure. In 2018, the average percentage of regional personnel expenditure in Indonesia was around 35.6%, while the capital expenditure was only 19.4% (DJPK, 2018). In 2022, the situation was getting worse because the personnel expenditure was allocated 62.5%, while the capital expenditure was only 15.8% (DJPK, 2022). Although the Minister of Home Affairs Regulation Number 27 of 2013 has stated that each region should allocate its capital expenditure at least 30% from the APBD, but in reality there are still many regions that haven’t complied with this rule. In Riau, until 2021 there have been no regencies/cities that can fulfill the regulation. The purpose of this paper is to analyze the impact of General Alloca-tion Fund (DAU), Special Allocation Fund (DAK), Revenue Sharing Fund (DBH) and Local Own-Source Revenue (PAD) on capital expenditure in regencies/cities of Riau in the period of 2018-2021. The analytical method applys multiple regression analysis based on Pooled Least Square model. The result reveals that capital expenditure is sig-nificantly and positively affected by DAK and PAD. Meanwhile, DBH and DAU have insignificant effect on capital expenditure of Riau in 2018-2021

Collective Action In The Governance Of Improving Local Own-Source Revenue In Makassar City

Collective Action In The Governance Of Improving Local Own-Source Revenue In Makassar City

Local Fiscal Health in Russia: An Achilles’ Heel of Fiscal Federalism?

ABSTRACT This article is the first attempt to systematically study local public finance in contemporary Russia. We document that local governments do not have sufficient own-source revenues, are increasingly more dependent on intergovernmental fiscal aid, lack access to market borrowing, and suffer from structural flaws in the design of intergovernmental fiscal relations. Additionally, we present the results of the modified Brown’s 10-point test to compare local fiscal health across the Russian regions. Finally, we assess the strength of local fiscal incentives in 2012–2021 and demonstrate that local governments in Russia lack capacity to foster local economic growth through the tax code.

Analisis Potensi Pendapatan dan Kemandirian Daerah di Kawasan Arek Jawa Timur

The study aims to determine the magnitude of the potential for regional income and independence arek region in East Java Province in 2017 – 2021, by calculating the Location Quotient analysis, the degree of fiscal decentralization, and the regional fiscal capacity index. The results of the LQ calculation show that Batu City has the highest LQ in other service sectors. Analysis of the highest degree of fiscal decentralization and regional fiscal capacity index is owned by Surabaya City. The research results recommend that local governments need to optimize their economic potential as a source of tax revenue, increase local own-source revenue (PAD) so that they’re not dependent on transfers from central government, and increase regional capabilities by expanding a new tax base to finance government spending.

Local Tax Optimization Strategy In Jambi City: A Literature Review

This scientific paper seeks to evaluate the ability of local taxation as a source of income, the level of tax participation and the efficiency of the tax collection mechanism in Jambi City budget 2018-2022. The analytical methodology used in this research includes descriptive and qualitative approaches. Descriptive analysis incorporates computational methods that are illustrated in the form of numerical data, tabulations, and graphical representations. In the meantime, the qualitative aspects include conducting intense interviews that are analyzed using SWOT. Based on the findings from the analysis of local tax effectiveness covering from 2011 to 2023, it reveals that the efficiency of local taxation shows variability in different years. Based on existing literature and comparisons between studies that have been conducted, tax optimization can be carried out in Jambi City in line with the principle of fiscal decentralization in regional autonomy by enforcing regulations to ensure the creation of sustainable development and economic growth. Some of the things that can be done are increasing tax compliance, digitalization and simplifying the tax structure. This discussion produces input to the Jambi City Government to explore the potential of local revenue, which influences the growth of Regional Own-Source Revenue (PAD). Therefore, optimal development can lead to positive outcomes for the community, such as the economic growth of people in Jambi City and the optimization of tax revenue.

Determination Of Local Own-Source Revenue (Pad) In Districts And Cities Across East Java Province In 2020-2021

This study aims to determine the effect of regional tax revenues, regional levies and results of separated regional wealth management on local own-source revenue (PAD) in regencies and cities throughout East Java in 2020-2021, either partially or simultaneously. This study uses a quantitative approach with multiple linear regression analysis methods, classical assumption tests, hypothesis testing and coefficient determination (R2). The results of this study show that simultaneously (test f) local taxes, regional fees and the results of regional wealth management which are decided to affect regional original income (PAD) in Regencies and Cities throughout East Java in 2020-2021. Meanwhile, partially (t test) the regional tax variable has an effect on regional original income (PAD) in Regencies and Cities throughout East Java in 2020-2021. The regional retribution variable has a positive effect on regional original income (PAD) in Regencies and Cities throughout East Java in 2020-2021. Meanwhile, the results of separated regional wealth management have no effect on regional original income (PAD) in regencies and cities throughout East Java in 2020-2021.

Pengaruh Pertumbuhan Ekonomi (PDRB), Pendapatan Asli Daerah, Dana Alokasi Umum Dan Dana Alokasi Khusus Terhadap Belanja Daerah Di Kabupaten Timor Tengah Selatan

This study was conducted with the aim of determining the effect of Economic Growth (GRDP), Regional Original Revenue, General Allocation Fund and Special Allocation Fund on Regional Expenditure in South Central Timor Regency. The analysis method used is multiple linear regression. The results of this study indicate that partially the economic growth variable has a positive and significant effect on regional expenditure, the regional own-source revenue variable has a positive and significant effect on regional expenditure, the general allocation fund variable has a positive and significant effect on regional expenditure and the special allocation fund variable has a positive and significant effect on regional expenditure in South Central Timor Regency. Simultaneously or together, the variables of economic growth, local revenue, general allocation funds and special allocation funds have a significant effect on regional expenditure in South Timor Tengah Regency.

The Influence of Fiscal Balance Funds and Regional Own-Source Revenues on Regional Expenditures

The purpose of this study is to examine the relationship between regional original income and general allocation funds as well as the spending patterns of regency and municipal administrations in West Sumatra Province from 2018 to 2022. Twenty regencies/cities and West Sumatra Province were selected for the sample using a comprehensive sampling technique within the allotted period. A t-test result of 7.788 and a significance level of 0.000 demonstrate that the General Allocation Fund does, in fact, have an effect on Regional Expenditures. There is a discrepancy between the calculated t-value (7.788) and the t-table value (1.987), which means that the significance value (0.000) is less than 0.05. There is no statistically significant relationship between regional original income and regional expenditures, as shown by the calculated t-test result of 1.389 and a significance value of 0.168. The comparison reveals that the calculated t-value (1.389) is lower than the t-table value (1.987), and that the significance value (0.168) is more than 0.05. However, Regional Expenditures are affected by both the General Allocation Fund and Regional Original Income, as shown by the F-test result of 51.233. This number is much lower than the 0.05 cutoff and higher than the 3.10 F-table value at the 0.000 level of significance.

Effectiveness of Local Revenue and Balance Funds on Capital Expenditure in Indonesian Local Government

Local revenues are revenues obtained by regions based on local regulations to finance regional expenditures, and balancing funds are sources of regional income received from the central government for equitable distribution of regional development in the context of implementing regional autonomy to achieve the objectives of granting autonomy to the regions. The purpose of this study is to determine the effect of regional own-source revenue and equalization funds partially on capital expenditures in provinces in Indonesia in 2020-2022. In this research, the author uses agency theory which outlines this theory provides a disclosure. This research uses a survey approach with a quantitative method research type. The data collection technique uses secondary data with secondary data documentation instruments. The population in this study are 34 provinces in Indonesia in 2020-2022 which will be sampled. The data is processed using the panel data regression statistical method. The results showed that local own-source revenue and equalization funds had a positive and significant effect on capital expenditures in provinces in Indonesia. This indicates that local own-source revenues and equalization funds, which are the largest part of regional revenues, are very capable of influencing the allocation of capital expenditures.

ANALISIS EFEKTIVITAS DAN KONTRIBUSI PENERIMAAN PAJAK BUMI DAN BANGUNAN PEDESAAN DAN PERKOTAAN TERHADAP PENDAPATAN ASLI DAERAH KABUPATEN TAPANULI UTARA

This research aims to find out how much effectiveness and contribution to rural and urban land and building tax revenue in Tapanuli Utara Regency. The population in this study is target data and realization of rural and urban land and building tax revenues in the Tapanuli Utara Regency Regional Revenue Agency from 2009 to 2022. The sample in this study is the target and realization of rural and urban land and building tax revenues in 2018- 2022. The research method used is descriptive analysis with formulas for level of effectiveness and level of contribution. The results of this research, it shows that the level of to rural and urban land and building tax revenue effectiveness in 2018-2022 has an average of 89.24%. With the "quite effective" category. And the to rural and urban land and building tax revenue contribution to local own-source revenue for 2018-2022 has an average of 2.20% and is classified as "very low". And the level of rural and urban land and building tax contribution to local own-source revenue in 2013-2017 has an average of 1.92%. In the "very poor" category. The level of contribution of rural and urban land and building tax revenue to local own-source revenue during the 5 years of research, namely 2018-2022, has increased from the 5 years before the research, namely 2013-2022.

Budgeting Behavior: Indonesian Local Government Budget Predictions

Objective: The behaviors of overreaction and underreaction exhibited by public sector budget planners have an impact on the disparity between the initial budget set at the beginning of a period and the actual budget realization at the end of the period. This study aims to examine how budget planners in Indonesia predict budgets for local governments, specifically whether there is a difference in the overreaction or underreaction behavior of public sector budget planners among districts and cities in the South Sulawesi Province of Indonesia. Theoretical Framework: This study aims to elucidate the cognitive mechanisms of representativeness bias and the anchoring-adjustment heuristic, which may impact the behavior of individual budget planners in determining budget amounts for future periods and their reliance on past information. Method: This research employs a quantitative approach with a causal and explanatory study design. In this study, the independent variable is the behavior of public sector budget builders, while the accuracy of their predictions for the future budget of the public sector constitutes the dependent variable. The quantitative approach was selected because it aligns with the research's objective of discerning potential misestimations in the behavior of budgeting teams when determining the budgetary allocations for the upcoming year in various patterns or conditions. The research's respondents are the budgeting teams from various districts and cities in the South Sulawesi Province. To test the research subjects, a heuristic of representativeness and anchoring-adjustment is followed when utilizing patterns of revenue realization from previous years (time series). Results and Discussion: This study found that the average Uncertainty in Budget Planner Predictions for Local Governments in each district and city in South Sulawesi, Indonesia, is consistent and does not exhibit significant differences. This research is highly significant as it can provide a valuable contribution to public sector budget planners in Indonesia when establishing budget amounts for the forthcoming period. Research Implications: This study seeks to contribute to advancing research in the realm of public sector budgeting in South Sulawesi, particularly by providing an overview of the occurrence of overreaction and underreaction behaviors among the planners of Local Own-Source Revenue (PAD) budgets in South Sulawesi Province. Originality/Value: The novelty of this study lies in the empirical validation of the utilization of the concepts of representativeness and anchoring-adjustment in the behavior of public sector budget planners when determining the budget amounts for the upcoming period.

ANALISIS PENGARUH JUMLAH PENDUDUK, PRODUK DOMESTIK REGIONAL BRUTO (PDRB), INFLASI DAN JUMLAH TENAGA KERJA TERHADAP PENDAPATAN ASLI DAERAH (PAD) KOTA MALANG TAHUN 2012-2021

This study aims to determine the effect of total population, Gross Regional Domestic Product (GDP), inflation and total employment to Region Own-Source Revenue (PAD) in 2012-2021. This study used qualitative approach and literature review method. The data were obtained from Central Bureau of Statistics and the annual financial reports of Malang City through the official website which can be accessed by the public. The results of this study indicated that the variables of total population, inflation and total employment do not have a significant influence on Region Own-Source Revenue (PAD). However, Gross Regional Domestic Product (GDP) has a positive and significant influence on Region Own-Source Revenue (PAD). Meanwhile, total population, Gross Regional Domestic Product (GDP), inflation and total employment have a simultaneous influence of 96,4% on Region Own-Source Revenue (PAD).

PENGARUH PENDAPATAN ASLI DAERAH DAN DANA OTONOMI KHUSUS TERHADAP INDEKS PEMBANGUNAN MANUSIA MELALUI BELANJA MODAL SEBAGAI VARIABEL MODERATING

Humans are any region’s main source of development. Therefore, improvement on their quality, which is measured through Human Development Index (HDI), is necessary. Cities and regencies in Papua city are high in discrepancy concerning the said index. Therefore, the roles of the government as the policy makers are crucial. The objective of this research is to identify the effects of local own-source revenue and special autonomy funds on HDI with capital expenditures as the moderating variable. This research uses secondary data from 29 regencies and cities in Papua province, from 2017 to 2021 and was analyzed through panel data regression with interaction. The hypothesis testing and the model feasibility assessment were conducted using t-test, F-test, and coefficient of determination test. This study finds that local own-source revenue, special autonomy funds, and capital expenditures negatively and significantly influence HDI. Furthermore, capital expenditures as the moderating variable were found to strengthen the partial effects of local own-source revenue and special autonomy funds to HDI. Finally, this research is expected to serve as evaluation material and reference for the government in its policy-making processes and to enrich the treasury of knowledge in financial literacy.

PENGARUH PAD, BELANJA MODAL, DAN PERTUMBUHAN EKONOMI TERHADAP KEMISKINAN DI KABUPATEN/KOTA PROVINSI JAWA TENGAH TAHUN 2018-2022

This study aims to analyze the effect of Local Own-source Revenue, Capital Expenditure, and Economic Growth on Poverty in the Regency/City of Central Java Province in 2018-2022. This study uses a quantitative approach with multiple linear regression analysis methods. The data obtained in this study are secondary data sourced from the website of the Central Statistics Agency (BPS), DJPK Ministry of Finance, as well as related publications. The type of data in this study is the panel data, which is a combination of time series data and cross section data. Data time series in the form of the 2018-2022 fiscal year, while the cross section data is in the form of 35 regencies/cities in Central Java Province. The results of this study were that PAD had a significant positive effect on poverty, capital expenditure had no effect on poverty, and economic growth had a significant negative effect on poverty.

Determinants of Local Revenue in West Nusa Tenggara Province

The economic growth of a region can be seen from the contribution of increasing regional original income originating from sources of taxes, regional levies, regional property and other separated regional wealth management results, and other legitimate regional revenues. The Province of West Nusa Tenggara in the last few decades has shown a significant increase in local revenue. In this study, the impact of population, inflation, and Gross Regional Domestic Product (GRDP) on local revenue from 2010 to 2021 is explored. The Generalized Method of Moments (GMM) technique uses district or city annual data in a quantitative panel data regression model for the study. According to the findings of statistical studies, local own-source revenue is significantly positively affected by government spending, population, and gross regional product (GDP), but inflation-related price increases have a negligible impact on local revenue. The money supply determines the rate of inflation, the high rate of inflation is caused by the amount of money in circulation.

LOCAL OWN-SOURCE REVENUE AND ITS DETERMINANTS

The purpose of this research is to obtain empirical evidence about the effect of Total Population, Domestic Investment, and Gross Regional Domestic Product towards Local Own-source Revenue. The object of this research are districts and cities in the province of Banten in 2016-2020. Sample of this research were selected using census method and testing was performed using multiple linear regression method. The observation of this research are 8 Districts and cities in the province of Banten namely Pandeglang District, Lebak District, Tangerang District, Serang District, Tangerang City, Cilegon City, Serang City, and South Tangerang City. The result of this research are Total Population, Domestic Investment, and Gross Regional Domestic Product simultaneously have significant effect toward Local Own-source Revenue. Partially, Total Population and Gross Regional Domestic Product has a significant effect towards Local Own-source Revenue, while Domestic Investment does not have a positive effect toward Local Own-source Revenue.

Analyzing Local Tax Revenue Optimization Strategies Using The SOAR Approach: A Case Study In Susu City

This study uses the SOAR (Strengths, Opportunities, Aspirations, Results) approach to analyze the factors that influence local tax revenue in Boyolali Regency, Central Java. Although regional autonomy provides opportunities, dependence on central transfers is still high. The last five years of data show good target achievement, but the contribution of local own-source revenue (PAD) to the total revenue of the Regional Budget (APBD) is relatively small. Qualitative methods with a post-positivism paradigm were used, and triangulation was carried out based on the results of interviews, observations, and documentation. The results of the study found that Boyolali Regency has not fully met the criteria or standards in the formulation of strategies to increase tax revenue according to the SOAR framework. The strengths of Boyolali Regency lie in the size of its government area, which is the basis of the PBB object, as well as the diversity of local culture. Opportunities are the large number of PBB objects that are still not registered as tax objects and the large amount of uncollected tax receivables. Aspirations are not taken seriously, and the measurement of results has not fully considered the real potential of local tax revenue. In facing this challenge, further efforts are needed to formulate a more comprehensive strategy involving various parties. Suggestions for BKD Boyolali are to consider the utilization of local culture, expansion of the PBB base, increased cooperation that provides added value, increased community participation, and setting targets in accordance with existing regional potential. And the suggestion to the next researcher is to do a comparison with other objects or methods. With the implementation of the right strategy, it is expected to reduce dependence on the transfer of funds from the central government and achieve an increase in local tax revenue and a positive contribution to regional development.