The effect of local tax revenue on economic growth in Sumatera

Dewi, Felisia (2019) The effect of local tax revenue on economic growth in Sumatera. Bachelor thesis, Universitas Pelita Harapan.

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Abstract

Indonesia is one of the largest among Southeast Asian countries and also as the largest archipelago in the world. Indonesian administrative are divided into provinces and each province consists of several districts and municipalities. The local governments in Indonesia have the autonomy to administer their region and the local governments also have the autonomy to supervise the financial on that region. Just as the general taxes, local taxes also plays as a budgetary for the locals and regulatory. Local tax is revenue that levied based on the local laws and regulations. Economic growth is a material standard of living have improved substantially over time for most families in most countries. This advance comes from rising incomes, which have allowed people to consume greater quantities of goods and services. One important indicator to determine the economic conditions of a region in a given period is gross regional domestic product (GRDP). The purpose of this research is to examine the effect of local tax revenue on economic growth in Sumatera. This research is a quantitative descriptive research using secondary data that collected from BPS Statistics Indonesia, consist of time series data during eight years (2010 - 2017) and cross section data with ten provinces that result 80 samples. Using census sampling method, which all population can become sample. The analysis model used in this research is the simple linear regression model. The results of this research show that local tax revenue has a positive and significant effect on economic growth.

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