The Effect of Regional Taxes, Regional Levies, Balancing Funds, and other Legitimate Regional Revenues on Regional Independence Through Direct Expenditure (Empire Study: District/City Governments in East Nusa Tenggara Province)

Abstract

The study aims to analyze regional financial independence as seen from regional taxes, regional levies, balancing funds and other legitimate income that has an impact on regional independence through direct spending on districts and cities in East Nusa Tenggara Province for the 2017-2019 period. The data used in this study is a quantitative data type and the source of data included in this study is secondary data. In this study, the samples used were 21 districts and 1 city in East Nusa Tenggara Province. The data collection technique in this research is by documentation, namely looking at the realization and budget reports at the Central Statistics Agency (BPS) NTT and the Director General of Fiscal Balance (DJPK) for the 2017-2019 period. The analytical method used in this research is path analysis. The results of this study indicate that in the substructure equation I, regional taxes, regional levies, balancing funds and other legitimate regional revenues simultaneously have an impact on direct expenditures. Meanwhile, in the substructure equation II, regional taxes, regional levies, balancing funds, other legitimate regional income and direct expenditures jointly affect regional independence. In the partial test of substructure I, regional taxes and other legitimate local revenues have a positive and significant impact on direct spending. However, regional levies and balancing funds have no impact on direct spending. In substructure equation II, there is a positive relationship between regional taxes and direct expenditures on regional independence, balancing funds and other legitimate regional revenues has a negative impact on regional independence. However, regional levies have no effect on regional independence. Regional taxes and other legitimate regional revenues do not affect regional independence through direct spending. Meanwhile, regional levies and balancing funds through direct spending indirectly affect regional independence.

Analysis of Financial Ratios to Assess Local Government Financial Performance in Labuhan Batu District, North Sumatra, Indonesia

“…A. Saputra, 2021). Thus, so far, most of the government expenditure is still very dependent on the central government (Gonschorek et al, 2018;Wiryawan & Otchia, 2022), and also shows that the government's ability to increase original local government revenue, such as regional taxes, levies and others, is still relatively low so that regional financial performance is still considered very low (Awwaliyah et al, 2019;Kii & Sumtaky, 2022).…”