Effects Of Regional Taxes, Capital Expenditures, Regional Original Revenues, And General Allocation Funds On Per Capita Income In Pemko/Regency Government In North Sumatra Province (2011-2015)

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The Impact of Regional Taxes, Capital Expenditures, Regional Original Revenues, and General Allocation Funds on Per Capita Income in Pemko/Regency Governments in North Sumatra Province (2011-2015)

Introduction

The North Sumatra Province in Indonesia has been experiencing rapid economic growth in recent years, with the per capita income of its residents increasing significantly. However, the question remains as to what factors have contributed to this growth. This study aims to explore the effect of regional taxes, capital expenditures, regional original revenues, and general allocation funds on per capita income in the city and district governments in North Sumatra Province from 2011 to 2015. By analyzing the impact of these factors, this study hopes to provide valuable insights for policymakers and local governments in the region.

Background

The North Sumatra Province is one of the largest provinces in Indonesia, with a total of 33 districts/cities. The province has been experiencing rapid economic growth in recent years, with the per capita income of its residents increasing significantly. However, the question remains as to what factors have contributed to this growth. Regional taxes, capital expenditures, regional original revenues, and general allocation funds are some of the key factors that have been identified as having a significant impact on per capita income.

Methodology

This study relies on quantitative data in the form of secondary data taken from 22 districts/cities from a total of 33 districts/cities in the province. The sample selection method used is purposive sampling, while hypothesis testing is carried out by multiple regression analysis and residual analysis. The study aims to explore the effect of regional taxes, capital expenditures, regional original revenues, and general allocation funds on per capita income in the city and district governments in North Sumatra Province from 2011 to 2015.

Results

The results of the study show that local taxes and local revenue have a significant effect on per capita income. In addition, when seen simultaneously, a combination of local taxes, capital expenditure, local revenue, and general allocation funds also have a significant impact on per capita income in the area.

Discussion

Regional taxes are one of the important sources of income for local governments. This tax serves as a tool to collect funds used for various development needs and public services. With the increase in local taxes, the government can increase public spending which in turn can encourage regional economic growth and increase the income per capita of the community.

On the other hand, Regional Original Revenue (PAD) also plays an important role in increasing regional fiscal capacity. PAD includes various sources of income originating from taxes, levies, and results of regional wealth management. When the PAD increases, the local government has more flexibility in allocating funds for programs that support the welfare of the community and infrastructure development, which certainly has a positive impact on per capita income.

Capital expenditure, which is an expenditure for investment and infrastructure development, also has a significant influence. Investment in infrastructure can create new jobs and increase economic efficiency, thereby encouraging regional economic growth. Along with that, the General Allocation Fund (DAU) from the central government to the regions also acts as a driving factor for per capita income. DAU helps local governments in overcoming limited resources and facilitating various development programs.

Conclusion

Based on these findings, it is important for local governments in North Sumatra Province to continue to increase the effectiveness of regional tax management and local revenue. Efforts to increase fiscal capacity through good management can encourage sustainable development and improve the welfare of the community.

In a broader context, this research provides an overview of the importance of proper regional financial planning and management. Policies that focus on optimizing local taxes, PAD management, and the use of wise general allocation funds will contribute to the achievement of better per capita income, which in turn has an impact on the quality of life of the people.

Recommendations

Based on the findings of this study, the following recommendations are made:

  1. Increase the effectiveness of regional tax management: Local governments in North Sumatra Province should continue to increase the effectiveness of regional tax management to increase public spending and encourage regional economic growth.
  2. Improve PAD management: Local governments should improve PAD management to increase the flexibility in allocating funds for programs that support the welfare of the community and infrastructure development.
  3. Increase capital expenditure: Local governments should increase capital expenditure to create new jobs and increase economic efficiency, thereby encouraging regional economic growth.
  4. Optimize the use of DAU: Local governments should optimize the use of DAU to overcome limited resources and facilitate various development programs.

By implementing these recommendations, local governments in North Sumatra Province can improve the per capita income of their residents and contribute to the achievement of better quality of life.

Limitations

This study has several limitations that should be noted. Firstly, the study relies on secondary data, which may not be comprehensive or accurate. Secondly, the study only focuses on the impact of regional taxes, capital expenditures, regional original revenues, and general allocation funds on per capita income, and does not consider other factors that may have an impact on per capita income.

Future Research Directions

Future research should consider the following directions:

  1. Investigate the impact of other factors on per capita income: Future research should investigate the impact of other factors, such as education, healthcare, and infrastructure, on per capita income.
  2. Examine the effectiveness of regional tax management: Future research should examine the effectiveness of regional tax management and identify areas for improvement.
  3. Analyze the impact of PAD management on per capita income: Future research should analyze the impact of PAD management on per capita income and identify areas for improvement.
  4. Investigate the impact of capital expenditure on per capita income: Future research should investigate the impact of capital expenditure on per capita income and identify areas for improvement.

By addressing these limitations and future research directions, policymakers and local governments in North Sumatra Province can make informed decisions to improve the per capita income of their residents and contribute to the achievement of better quality of life.
Frequently Asked Questions (FAQs) about the Impact of Regional Taxes, Capital Expenditures, Regional Original Revenues, and General Allocation Funds on Per Capita Income in Pemko/Regency Governments in North Sumatra Province (2011-2015)

Q: What is the main objective of this study? A: The main objective of this study is to explore the effect of regional taxes, capital expenditures, regional original revenues, and general allocation funds on per capita income in the city and district governments in North Sumatra Province from 2011 to 2015.

Q: What is the sample size of this study? A: The sample size of this study is 22 districts/cities from a total of 33 districts/cities in the province.

Q: What is the methodology used in this study? A: The methodology used in this study is quantitative data analysis, specifically multiple regression analysis and residual analysis.

Q: What are the key findings of this study? A: The key findings of this study are that local taxes and local revenue have a significant effect on per capita income, and when seen simultaneously, a combination of local taxes, capital expenditure, local revenue, and general allocation funds also have a significant impact on per capita income in the area.

Q: What is the significance of regional taxes in this study? A: Regional taxes are one of the important sources of income for local governments, and this tax serves as a tool to collect funds used for various development needs and public services.

Q: What is the role of Regional Original Revenue (PAD) in this study? A: PAD plays an important role in increasing regional fiscal capacity, and includes various sources of income originating from taxes, levies, and results of regional wealth management.

Q: What is the impact of capital expenditure on per capita income in this study? A: Capital expenditure has a significant influence on per capita income, as investment in infrastructure can create new jobs and increase economic efficiency, thereby encouraging regional economic growth.

Q: What is the role of General Allocation Fund (DAU) in this study? A: DAU acts as a driving factor for per capita income, as it helps local governments in overcoming limited resources and facilitating various development programs.

Q: What are the recommendations of this study? A: The recommendations of this study are to increase the effectiveness of regional tax management, improve PAD management, increase capital expenditure, and optimize the use of DAU.

Q: What are the limitations of this study? A: The limitations of this study are that it relies on secondary data, which may not be comprehensive or accurate, and it only focuses on the impact of regional taxes, capital expenditures, regional original revenues, and general allocation funds on per capita income.

Q: What are the future research directions of this study? A: The future research directions of this study are to investigate the impact of other factors on per capita income, examine the effectiveness of regional tax management, analyze the impact of PAD management on per capita income, and investigate the impact of capital expenditure on per capita income.

Q: What are the implications of this study for policymakers and local governments? A: The implications of this study for policymakers and local governments are that they should continue to increase the effectiveness of regional tax management, improve PAD management, increase capital expenditure, and optimize the use of DAU to improve the per capita income of their residents and contribute to the achievement of better quality of life.