DO LOCAL TAXES DRIVE LOCAL WEALTH? EMPIRICAL EVIDENCE IN WEST JAVA

Abstract

Regional taxes play an important role in Regional Original Revenue (ROR/PAD) and development financing, especially in the era of regional autonomy. However, amidst the diverse economic growth between regions, the implementation of regional tax revenues varies greatly (inconsistent), therefore this study aims to analyze the effect of regional taxes including hotel tax, advertising tax, street lighting tax, entertainment tax, and parking tax on Regional Original Income (ROR/PAD) in West Java Province during the period 2013–2023. This study uses a quantitative approach with secondary data sourced from the Regional Financial Information System (RFIS/SIKD) portal of the Ministry of Finance of the Republic of Indonesia. The data analysis techniques used include classical assumption tests and multiple linear regression, with the help of EViews software as an analysis tool. The results of the study indicate that the F test (simultaneous test) of the five independent variables, namely Hotel Tax, Advertising Tax, Street Lighting Tax, Entertainment Tax, and Parking Tax have a significant effect on ROR/PAD, this shows that the five types of taxes together have a significant contribution to ROR/PAD, then the results of the T test (partial test) show that only variable X3 (Street Lighting Tax) has a significant effect on ROR/PAD while the other variables are not significant. This finding emphasizes the importance of evaluating sustainability in regional tax management to strengthen fiscal independence and improve the financial performance of local governments in West Java.