The relationship between specific tax revenues and regional original income in DKI Jakarta

Abstract

Purpose: This study aims to analyze the effect of specific regional taxes, namely hotel tax, entertainment tax, and land and building tax, on the Regional Original Income (PAD) of the DKI Jakarta provincial government. The research aims to identify the tax type that contributes most significantly to increasing local revenue and to provide insights into the effectiveness of tax collection in supporting fiscal independence.

Methods: The study employs an associative quantitative research approach, utilizing panel data regression analysis with EViews 9. The dataset comprises 72 observations selected through purposive sampling, derived from the Regional Original Revenue Agency (Bapenda) reports for the 2016–2021 period. Each variable was tested to measure its influence on regional income using both statistical and econometric evaluation methods.

Findings: The results show that land and building tax is the most significant contributor to PAD, followed by hotel tax, which also has a positive effect. In contrast, the entertainment tax demonstrates no considerable impact on regional revenue. Collectively, these three tax variables explain 50.18% of the variance in PAD.

Practical implications: The findings advise policymakers to prioritize optimizing the collection of land and building tax, as well as hotel tax, to strengthen regional fiscal autonomy. A strategic review of the ineffective entertainment tax is also recommended to enhance its revenue potential.