Analysis Of The Impact Of Equalization Funds On Tax Effort In Districts And Cities In Central Java Province From 2018 – 2022

Atsiila Salma Nazifah Khoerunissa, Kikin Windhani, Abdul Aziz Ahmad, Tito Juwono Pradekso

Abstract


This study aims to analyze the impact of equalization funds, which consist of the General Allocation Fund, Special Allocation Fund, and Revenue Sharing Fund, on local tax efforts in 35 regencies and cities in Central Java Province from 2018 - 2022. This study uses the panel data regression method to analyze data from all regencies and cities in Central Java Province during 2018–2022. The research findings are expected to provide insights into how the transfer funds, namely the General Allocation Fund, Special Allocation Fund, and Revenue Sharing Fund, affect local tax effort, as well as to offer policy recommendations for enhancing local fiscal autonomy by improving the effectiveness of local tax collection. This study is expected to contribute to understanding the dynamics of local finance and provide a basis for formulating more effective policies to enhance local fiscal autonomy. After conducting regression analysis, the research results conclude that general allocation funds have a positive but not significant effect. Meanwhile, revenue sharing funds have a positive and significant effect, and special allocation funds also have a positive and significant effect on the tax efforts of 35 regencies and cities in Central Java from 2018 to 2022.

Keywords: General Allocation Fund, Special Allocation Fund, Shared Revenue Fund, Tax Effort, Fiscal Decentralization


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