Analysis Of The Effect Of Local Taxes, Regional Levies And Other Legal PADs On The Growth Of The City Government's APBD In North Sumatra Province

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Analysis of the Effect of Regional Taxes, Regional Levies, and Other Legitimate PAD on the Growth of the City Government APBD in North Sumatra Province

Introduction

The financial capacity of a region is a crucial factor in determining its ability to implement various development programs. One of the key indicators of a region's financial capacity is the Regional Revenue and Expenditure Budget (APBD). In this context, the APBD is a vital tool for the city government in North Sumatra Province to manage its finances effectively. However, the growth of the APBD is influenced by various factors, including local taxes, regional levies, and other legitimate Regional Original Revenue (PAD). This study aims to identify the effect of these factors on the growth of the APBD in the city government in North Sumatra Province.

Background

The APBD is a critical component of a region's financial management system. It outlines the revenue and expenditure of the region for a specific period, typically a year. The APBD is prepared by the city government in consultation with various stakeholders, including the regional parliament, the regional administration, and the community. The APBD is a reflection of the region's financial capacity and its ability to implement various development programs.

In North Sumatra Province, the APBD is a vital tool for the city government to manage its finances effectively. The province has a diverse economy, with various sectors contributing to its revenue, including agriculture, industry, and services. The city government in North Sumatra Province has been implementing various development programs, including infrastructure development, education, and healthcare.

Research Methods

This study uses a quantitative approach, with a focus on secondary data. The data collected is in the form of panels, which combines time series and cross-section data from eight city governments in North Sumatra Province during the period 2017 to 2020. The variables analyzed in this study include:

  • APBD Growth (Y): This variable measures the growth of the APBD in the city government in North Sumatra Province.
  • Local Tax (X1): This variable measures the revenue generated from local taxes in the city government in North Sumatra Province.
  • Regional Levies (X2): This variable measures the revenue generated from regional levies in the city government in North Sumatra Province.
  • Other legitimate pads (X3): This variable measures the revenue generated from other legitimate PADs in the city government in North Sumatra Province.

The analysis was conducted using the Panel Data Regression Model through the EViews-9 application, which allows researchers to understand the interactions between various variables in the context of time and space.

Research Results

The results of this study showed several important findings:

  1. Local Tax: Regional taxes have a positive and significant influence on the growth of the APBD. This shows that the increase in revenue from local taxes contributes directly to the ability of the region in increasing its shopping budget. Success in regional tax management can create a strong income base, which can then be used to fund development projects and public services.

  2. Regional Retribution: Similarly, regional levies also show positive and significant effects on APBD growth. This indicates that every levy that is imposed on the community, such as parking fees, business licenses, etc., provides significant contributions to the increase in regional budgets. Policies that support the collection of efficient levies can increase urban government revenue.

  3. Other legitimate pads: Other variables legitimate PAD show positive effects, but not significantly on the growth of the APBD. This shows that although there is an increase in income earned from other sources such as assistance or grants, its contribution to the growth of the APBD is not as big as regional taxes and regional levies.

Conclusion and Recommendations

Based on the results of the analysis, it can be concluded that regional taxes and regional levies play a very important role in the growth of the City Government's APBD in North Sumatra Province. Therefore, it is essential for local governments to focus on managing and increasing the potential of this source of income. In this case, a better tax marketing strategy, an increase in public awareness of the importance of taxes and levies, and the application of technology in tax administration and levies can be an effective solution.

In addition, although other legitimate PADs do not show significant effects, the local government still needs to manage this source of income well, to ensure that any income potential can be utilized optimally.

Implications of the Study

This study provides several implications for policy makers in North Sumatra Province. Firstly, it highlights the importance of regional taxes and regional levies in the growth of the APBD. Secondly, it emphasizes the need for local governments to focus on managing and increasing the potential of this source of income. Finally, it suggests that the application of technology in tax administration and levies can be an effective solution to increase urban government revenue.

Limitations of the Study

This study has several limitations. Firstly, the data used is secondary data, which may not be comprehensive or accurate. Secondly, the study only focuses on the city government in North Sumatra Province, and the results may not be generalizable to other regions. Finally, the study only analyzes the effect of regional taxes, regional levies, and other legitimate PADs on the growth of the APBD, and does not consider other factors that may influence the growth of the APBD.

Future Research Directions

This study provides several directions for future research. Firstly, it suggests that further research is needed to explore the effect of other factors on the growth of the APBD, such as the role of the regional parliament, the regional administration, and the community. Secondly, it emphasizes the need for further research on the application of technology in tax administration and levies. Finally, it suggests that further research is needed to explore the impact of regional taxes and regional levies on the growth of the APBD in other regions.

Conclusion

In conclusion, this study provides an overview of the effect of regional taxes, regional levies, and other legitimate PADs on the growth of the City Government's APBD in North Sumatra Province. The results of the study show that regional taxes and regional levies play a very important role in the growth of the APBD, and that the application of technology in tax administration and levies can be an effective solution to increase urban government revenue. The study provides several implications for policy makers in North Sumatra Province, and suggests several directions for future research.
Frequently Asked Questions (FAQs) about the Effect of Regional Taxes, Regional Levies, and Other Legitimate PAD on the Growth of the City Government APBD in North Sumatra Province

Q1: What is the APBD, and why is it important?

A1: The APBD (Regional Revenue and Expenditure Budget) is a critical component of a region's financial management system. It outlines the revenue and expenditure of the region for a specific period, typically a year. The APBD is essential for the city government in North Sumatra Province to manage its finances effectively and implement various development programs.

Q2: What are regional taxes, and how do they contribute to the growth of the APBD?

A2: Regional taxes are a type of tax imposed by the city government in North Sumatra Province on its citizens and businesses. They contribute to the growth of the APBD by generating revenue that can be used to fund development projects and public services.

Q3: What are regional levies, and how do they impact the growth of the APBD?

A3: Regional levies are a type of tax imposed by the city government in North Sumatra Province on its citizens and businesses. They impact the growth of the APBD by generating revenue that can be used to fund development projects and public services.

Q4: What are other legitimate PADs, and how do they contribute to the growth of the APBD?

A4: Other legitimate PADs (Regional Original Revenue) are a type of revenue generated by the city government in North Sumatra Province from various sources, such as assistance or grants. They contribute to the growth of the APBD by generating revenue that can be used to fund development projects and public services.

Q5: What are the implications of this study for policy makers in North Sumatra Province?

A5: The study highlights the importance of regional taxes and regional levies in the growth of the APBD. It also emphasizes the need for local governments to focus on managing and increasing the potential of this source of income.

Q6: What are the limitations of this study?

A6: The study has several limitations, including the use of secondary data, which may not be comprehensive or accurate. The study also only focuses on the city government in North Sumatra Province, and the results may not be generalizable to other regions.

Q7: What are the future research directions suggested by this study?

A7: The study suggests several directions for future research, including exploring the effect of other factors on the growth of the APBD, such as the role of the regional parliament, the regional administration, and the community. It also emphasizes the need for further research on the application of technology in tax administration and levies.

Q8: What are the key takeaways from this study?

A8: The study provides several key takeaways, including the importance of regional taxes and regional levies in the growth of the APBD, the need for local governments to focus on managing and increasing the potential of this source of income, and the potential benefits of applying technology in tax administration and levies.

Q9: How can this study be applied in practice?

A9: The study can be applied in practice by policy makers in North Sumatra Province who are responsible for managing the APBD. They can use the findings of the study to inform their decisions about how to manage and increase the potential of regional taxes and regional levies.

Q10: What are the potential implications of this study for other regions?

A10: The study has potential implications for other regions that are facing similar challenges in managing their APBD. The study's findings can be used as a guide for policy makers in other regions who are seeking to improve their financial management systems.

Conclusion

In conclusion, this FAQ article provides an overview of the key questions and answers related to the effect of regional taxes, regional levies, and other legitimate PAD on the growth of the City Government's APBD in North Sumatra Province. The study provides several implications for policy makers in North Sumatra Province and suggests several directions for future research.