The Effect Of Local Tax Towards Local Revenue In Malang District

By: Angger Wahyudian Sangatta

0810233049

Advisory Lecturer:
Prof. Dr. Sutrisno, SE.,M.Si

ABSTRACT
This study aims to determine how much the effect of local tax towards local
revenue in Malang district at the year 2008 to 2012. Local tax is defined as a local
source of revenue that has an important contribution to regional development.
Regional development is an effort to regulate the development of the area and the
local facilities. Strong regional development is sourced from a good reception area.
The one source of local revenue is taxes. Taxes are very influential in the reception
area. In accordance with government regulations on implementation of regional
autonomy, the government itself has authorized an area to build their respective areas
with funding from the area. Government must optimize the sources of funding to
achieve good development. Under Law No. 33 of 2004 on Fiscal Balance between the
Central Government and Local Government states that local revenue sources are:
local revenue, fund balance, and other legitimate revenue.
This study applies descriptive data analysis and multiple regressions, by
employing computer software SPSS and Microsoft excel. The data used in this study
is a time series data for the year 2008 to 2012 from January to December. The data
include: local taxes, levies, result of wealth management and other legitimate revenue
in Malang district.
Results of the research have explained that during the period of 2008 through
2012, local taxes positively bring significant effect on the value of PAD (local
revenue) in the Malang district with elasticity of 1,006%. A local tax is a positive
effect on local revenue, but the regression has demonstrated that the local tax has the
effect of second rank after the levies on local revenue. The largest effect for local
revenue is levies. The suggestion withdrawn according to the researcher is by
increasing the performance quality and productivity of duties and functions of the
DPPKA Malang District in delivering the service to Taxpayers.
Keywords: local tax, local revenue, regional development, DPPKA.

Introduction

Regional Development is defined as an effort to organize the regional

development efforts and facility area. Regional economic development is a process
where the local government and the community together to manage existing resources
and to establish a partnership between local government and the private sector to
create new jobs that stimulate economic development activity in the region. The
development of a strong local economy is supported by a strong reception area.
Source of local revenue comes from local taxes and levies. Taxation plays an
important role for the government, as it provides such a broad entrance for
government revenue. Therefore, the government is always trying to increase revenue
from taxes. Indonesia republic government system has set the principle
decentralization, deconcentration and assistance tasks performed together. Local tax
and levy is a form of community participation in organizing regional autonomy, as
well as an important source of revenue to finance government administration and
development. According to Priantara (2012:543) local tax becomes a mandatory
contribution to the regions that are owed by the individual or entity that is enforceable
under the Act, to not get rewarded directly and used for the area for the maximum
prosperity of the people. With the local tax, the area will eventually thrive depending
on how much the tax area is decided. People who are aware of the tax would play a
very important role for the development of their respective areas, because the higher
the taxes the more the public awareness of the area will be developed. Each region
has different developmental conditions. The development of an area can be measured
from a large source of some revenue of area. Local taxes are a source of revenue,
which serves for the introduction of government funds to make the area grow. The tax
is a form of devotion and participation of the community in order to succeed the
direct national developments is also a form of government services to the public.
Highly functioning local taxes to fund the development of the area in accordance with
the regional autonomy. Under regulation is act No.32 Article 157 year 2004 about
Regional Government, the source of income to cover of cost for autonomous region
activities are consists of: Local Revenue, Fund Balance, Other Legal Income.
According to the Act about local revenue (PAD), the points consist of the
miraculous source of income, which are: The Local Taxes, Levies, The results of
local wealth management, Other local revenue legitimates.
In the regulations of the Act, it has been explained that the source of local
revenue is the result of local tax and local levies so that these two things will be very
influential for the development and improvement of the construction area. Local
revenue has been used for the convenience of the public and the development of their
respective regions. Local revenue will be prioritized to improve the quality of life and
the protection to the public. In accordance with the regulations Act no.32 year 2004
article 167, it is stated about revenue, expenditure, and financing which are:
Protection and improvement of quality of life as described in paragraph (1) is realized
in the form of improved basic services, education, the provision of health care
facilities, social facilities and adequate public facilities, and to develop social security
systems. So the payment of local taxes and levies is essential to improve the quality
of life. The tax is from community to community. Provision of local tax
determination rules set by local regulation (PERDA) each region. So each region has
different local tax rules vary.
Local taxes have been determined by the unfortunate district of Malang
PERDA. According to the district PERDA unfortunate number 8 of 2010 About
Local Tax on article 2 explain about type of local tax. Thus, the kinds of Local Tax
include: Hotel Tax, Restaurant Tax, Entertainment Tax, Advertising Tax, Street
Lighting Tax, Parking Tax, Non-Metallic Minerals and Rocks Tax, Groundwater Tax,
Swallow Bird Nest Tax, Rural and Urban Property Tax, Acquisition of Land and
Building Tax.
Various kinds of tax revenue will go into the area through the Department of
Malang district PAD, or Local Revenue. It can be concluded that many local revenue
sources are from different taxpayers. Taxpayers are on the allotment for personal or
organization which, according to local regulations, they are required to pay taxes.
Alike what was mentioned above, various local taxes have had an important part in
local revenue.
Based on the above data and descriptions mentioned, the researcher is
interested in conducting research on one of the local taxes that take part in the raise of
local revenue or abbreviated as PAD so as to enhance regional development.

Literature Review
Definition of Regional Autonomy
Based on Act number 32 / 2004 about Regional Government, Local
government, which set up and manage their own affairs in accordance with the
principles of autonomy and assistance tasks, aimed to accelerate the realization of
public welfare through the improvement, service, empowerment, and community
involvement, as well as increasing the power competitiveness of the region with the
principles of democracy, equality, justice, privilege and specificity of a region within
the system of the Republic of Indonesia.
Regional autonomy is an autonomous regional authority to regulate and to
manage the interests of the public at its own initiative based on the aspirations of the
people in accordance with the legislation. Autonomous regions, hereinafter referred
to as the region, are the legal entity that has boundaries authorities administer and
manage the affairs of government and public interest at its own initiative based on the
aspirations of the people within the Unitary Republic of Indonesia.
Act number 32 of 2004 states that the government had given authority to the
autonomous regions to manage and administer the affairs of government in a unitary
state of the Republic of Indonesia; this concept has been referred to the concept of
decentralization. Based on act number 32 / 2004 on Regional Governance,
decentralization is the transfer of power to local government by the autonomous
governments to regulate and manage the affairs of government in the system of the
Republic of Indonesia. According Khusaini (2006), in relation to the terms of
decentralization, the economic decentralization means the transfer of most of the
government's authority to local governments to implement the allocation function,
distribution function, and the stabilization function, which aimed to control and
manage the region's economy in order to create economic stability in nationwide.
According to Elmi (2002) quoted Khusaini, the decentralization means to give
a portion of the central government to local authorities, to implement and resolve
matters which are the responsibility and concern the interests of the region concerned
(autonomy). Matters relating to the interests and responsibilities of an area are for
example: public affairs and government, completion of service facilities, social
affairs, culture, religion and society.
 Mente (2010) emphasis to strengthening local autonomy in Makassar, in
addition to efforts to increase local revenue, should also pay attention to the
improvements in the ability of the apparatus aspects, organizational and
administrative reform, improving public participation and optimal utilization of the
potential of the area.
The concepts of decentralization aimed at the welfare of society and
accelerate the development of the autonomous region. By setting facilities and other
matters of a local government area that is set alone, then the area will be very familiar
conditions of their respective regions. With the regional autonomy, so the welfare of
people is created quickly and is suited to any local democracy. Settling aspects
apparatus capabilities, organizational and administrative reform will take effect for
the optimal effectiveness of regional autonomy. With the creation of local democracy
is good, then the automatic national democracy will also be improved? Either
regional autonomy will lead to good effect to the people, remains the question. The
effect is a form of facilities and good service to the community in the area.

Local Income
Based on act number 33 / 2004 about Financial Balance between Central and
Regional Government states that local revenue sources are:
a) Local Revenue (PAD).
Revenue is earned income areas collected by local regulations in accordance
with the laws and regulations which include: local tax; local levies; the results of a
separate wealth management area, and other revenue legitimate.
b) Fund balance.
Fund balance of the funds coming from the state budget revenues is allocated
to the area to fund local needs in the context of the implementation of regional
autonomy. Fund balance consists of two types, revenue-sharing and fund transfers.
Fund revenue consists of tax sharing and revenue sharing of Natural Resources.
The results are included in the division of taxation is the individuals income
tax, property tax, and Badan Perolehan Hak atas Tanah dan Bangunan (BPHTB).
While revenue sharing, is from natural resources from forestry, mining, fisheries,
mining, petroleum, mining, natural gas, and geothermal. Transfer of funds as a
component of other balance funds, consisting of the General Allocation Fund (DAU)
and Special Allocation Fund (DAK).
c) Other legitimate revenue.
While other local revenue sources, the funding comes from: remaining balance
budgets, receipt of loan areas, regional reserve fund, and proceeds from sales of
regional assets separated.

Definition of Tax
According Mardiasmo (2002:1), "Taxes are the dues of the people to the state
treasury under the law (which can be enforced) and received no services lead directly
demonstrated and used to pay for general expenses".
Understanding tax according Waluyo and Wiryawan B. Ilyas (2003:4),'' said
the tax is a contribution to the state (which can be imposed) shall be payable by the
payment to them under the regulations, by not getting back achievement, which can
directly appointed, and that the point is to finance expenditure public-expenditure in
relation to the duty of the state government organizing.
According to Smeets cited by Priyantara in the book titled Indonesia Taxation
(2012), "stating that taxes are owed to the government performance through general
norms, and that can be enforced, without services sometimes that can be shown in
terms of the individual; intention is to fund the government spending ".
According to Sumitro cited by Suandy the book is The Tax Law (2011), "Tax
is a transfer of wealth from the people to the state treasury to finance expenditures
and" Surplus "is used for public saving which is the main source of financing public
investment".
Based on the notions put forward by some tax experts, it can be concluded
that the tax is a contribution from the community to the State which shall be paid to
the interests of the State and to finance State expenditure coercive and based on state
laws and regulations without any. In payment of taxes, no gain of which can be
designated in terms of the individual by the government.
In addition to the elements of tax, from the definition above, it shows that
there are two functions of tax, which are:
1. Budgetary functions, which include as much money into the state treasury, in
order to finance state expenditures.
2. Regular functions, which taxes are used as a tool to manage the public good in
economic, social, or political purpose.
In the levy of a tax, there are principles that must be considered. According
Priantara (2012:5), the collection of taxes imposed on a person's wealth or
expenditure or some benefit or profit of a loss to the state treasury by the Government
or by the authority granted by statute or regulation of taxation, then the preparation of
tax laws must consider several principles. The principle of taxation which is very
famous to date is derived from Adam Smith in his book: "An inquiry in to the nature
of cause of the Wealth of Nations", that tax collection must meet four requirements
that are known as the "Four common of Taxation "or" The four maxims "which are:
a. Principle of equality
Equality principles relates to justice, in which tax collectors do the fairness and
equitability. Tax is levied according to ability to pay and is not required for those
who can not afford to pay taxes.
b. Principle of certainty
Certainty principle can be interpreted that taxes are done for certain, and not
arbitrary. Tax is not an assumption but a sure thing and therefore the principle of
ability to pay is expected to be able to know how much the tax due, to calculate
the amount of tax due for sure, and to pay and to report tax due prior to maturity.
c. Principle of convenience
Intent of this principle is the ability to pay taxes not paid under difficult
conditions and is also expected to pay the tax when the most appropriate for the
ability to pay to pay taxes. More details can be interpreted with the pay as you
earn
d. Principle of economy
This point of principle could mean that the cost of tax collection and compliance
costs for the tax payer liabilities should be as small as possible.
Collecting the Tax
It is not easy to impose taxes on the people. If it is too high, people will be
reluctant to pay taxes. Yet, if it is too low, then the development will not run due to
lack of funds. To avoid problems, the collection of taxes by Mardiasmo (2002:2) in
his book "Taxation'' shall meet requirements with which holding the tax must be fair.
1. Collecting taxes must be based on the law
2. Collecting taxes must not disturb the economy
3. Collecting taxes should be efficient
4. The system of tax collection should be simple
The description is as follows:
a) Collecting tax must be fair
Accordance with the purposes of the law, namely to achieve justice, and law
enforcement should be fair polling. Fair in statutory regulations including general
taxing and evenly, and tailored to the capabilities of each. and fair in its
implementation. Being fair in its implementation, can be achieved by providing a
taxpayer's right to appeal, and the delay in payment and to appeal to the council
tax considerations.
b) Collecting tax should be based on the Act
In Indonesia, the taxes provided for in the 1945 Constitution, Article 23, and
paragraph 2. It provides a legal guarantee to declare justice to both the State and
its citizens.
c) Collecting tax does not disrupt the economy
Collection should not interfere with the smooth operation of production and trade,
so as to avoid the economic downturn.
d) Collecting taxes should be efficient
Collecting taxes must be appropriate to budgetary function. The cost of tax
collection should be emphasized because this can lower than the results of the
collection.
e) The system of tax collection should be simple
A simple voting system will facilitate and encourage the community to meet tax
obligations. This requirement has been met by the new tax laws, such as:
(1) Stamp duty of 167 simplified into two kinds of tariffs rates.
(2) The VAT rate varied simplified to only one rate, namely 10%.
(3) Tax bodies and individuals for personal income tax to be simplified income tax
applicable to entities and individuals.

Definition of Local Tax

Basic tax regulation set forth in Local Tax Law of the Republic of Indonesia
is act number 28 Year 2009 on amendments to the Constitution Act of the Republic
of Indonesia number 34 year 2000 about Regional Taxes and Levies.
According to Yani (2002:45), "local tax is dues required by the individual or
entity to areas with no immediate reward are balanced, which can be imposed by the
prevailing laws and regulations that are used to fund local governance and local
development ".
Waluyo and Wirawan (2003:14) state that the local tax is "tax levied by the
local government to fund the local households''. According Priantara (2012:543),
"local tax is obliged to regional contribution which is payable by the individual or
entity that is enforceable under the law, to not get rewarded directly and used for the
area for the maximum prosperity of the people ".
The function of local tax is to meet the budget and spending. So the local tax
was useful to develop the quality of the local communities themselves, though the
local tax function does not meet the budget. According to Ismail (2011), the local tax
function is not merely to fulfill local budget. In term of tax as the budget fulfiller, the
emphasis is on its budgeter function instead of its regular function. From the two
functions, the later is closer to the meaning of local autonomy and must be more
exploited and developed, since it is related to the effort of service improvement.
From the definition above it can be deduced that the local tax collection is
done by the local government to the people that are forced to be paid to local
governments whose results are used for the betterment of the region and to finance
household region itself. The local tax has focused on budgetary functions than regular
function, as well as closer to the meaning of autonomy and well developed.

Types of Local Taxes

Based on act number 28 Year 2009 about Local Taxes and Levies, local tax in
Indonesia is divided into two, which are provincial taxes and tax districts / cities.
1) Tax Type in provinces comprising: Motor Vehicle Tax, Changeable Name of
Motor Vehicles Tax, Motor Vehicle Fuel Tax, Surface Water Tax, and Cigarette
Tax.
2) Tax Type in regency / municipality consists of: Hotel Tax, Restaurant Tax,
Entertainment Tax, Advertising Tax, Street Lighting Tax, Mineral Tax Not Metal
and Rock, Parking tax, Groundwater Tax, Tax Swallow's Nest, Land Tax and
Building Rural and Urban, Bea Acquisition Rights to Land and Building.
Types of local taxes by the city of Malang based on regional regulation
(PERDA) number 16 year 2010, explained the unfortunate city tax types consisting
of:

Previews Research
Ruswandi (2006) examined the analysis of the effects of the local county tax
revenue in Sumedang. She uses descriptive method and Principal Component
Regression. The results of this study indicate that during the period 1994 to 1999, the
tax potential regions in Sumedang constantly increased. Meanwhile, in 2000 a
decrease and an increase occur again in 2001 to 2006. Local taxes effect significantly
positive to the value of PAD in the District Sumedang with elasticity of 0.193, which
means that if a local tax increase of one percent, then the value of total receipts of
revenue will increase by 0.193 percent (cateris paribus). Relatively little effect on
local tax revenue in Sumedang district is caused by the many obstacles still facing the
Sumedang District Government, in this case of Satuan Kerja Perangkat Daerah
(SKPD) Department of Revenue associated with achieving the realization of local
tax.
These barriers include lack of adequate services to the taxpayer; there is often
no coordination between law enforcement officers. This is done in order to tax
enforcement and taxpayers subject to tax and the agency adopted a policy relating to
taxation are not always actively coordinate with Revenue, in which it is often limited
to human resources both in quantity and quality in the implementation of local tax
collections resulting information and communication on taxation often stunted, and
many people who are not obedient to pay taxes but no action was tough sanctions and
the formulation of laws are difficult to enforce taxation to crack down on crime.
Therefore, Sumedang District Government is expected to improve the management of
local taxes that provide great influence on PAD.
Research as conducted by Kurniawan (2010) presents the effects of taxes and
levies on economic growth in Ponorogo regency. The research applied a quantitative
approach that is ex post facto study the facts that already exist. The data used in this
study is time series data for 2005 through 2008 from January to December include
data: local taxes, levies and revenue Ponorogo. Results of multiple linear regression
showed that the positive effect of local taxes on economic growth of 1.90 and levies a
positive effect on economic growth of 0.873. According to the study, the researchers
suggested that the withdrawal of taxes and levies by monitored for more leverage and
increase the amount of labor because it can help the process of withdrawal and a wide
range of areas.

Logical Framework
The implementation of regional autonomy which is based on Law No. 32 /
2004 on Regional Government and act number 33 / 2004 about Financial Balance
between Central and Local Government authorizes, where local governments regulate
and administer its territory, including the granting of authority to use its own financial
resources. Therefore, local governments are required to increase local revenues in
order to finance the course of governance, development and social services in the
region. One source of local revenue that reflects the quality of the local economy is
local revenue (PAD). Source of revenue is derived from a variety of components such
as local taxes, levies, result of local wealth management, and other revenue
legitimate.
Based on existing problems, one of the components of local revenue (PAD),
which has a relatively important role in financing government and regional
development is regional taxes and levies. Therefore, in this study the author will
analyze the potential of local taxes and levies in Malang during the period of 2008
through 2012 and the effect of local tax revenues and levies against the PAD in
Malang district during the period of 2008 through 2012 and identified barriers faced
by the Department of Revenue of the city of Malang in the implementation of tax
collection and retribution by using descriptive analysis and multiple component
regression methods.

Hypothesis
The research hypothesis is preliminary conclusions that are still tentative.
According to Wijaya (2013) hypothesis is logically equated with the alleged
relationship between two or more variables, which are shown in the statement
verifiable. This hypothesis was used in this study is the simultaneous local taxes
affect economic growth. The influence of these variables hypothesized as follows:
1. Local tax is affected the size of local revenue. There are many sectors in
Malang that can be used as an object of local tax. Local tax system plays an
 important role in the passage of regional autonomy. With so many local tax
object is very helpful for the development of Malang district.
2. A levy is an influential source of local revenue. Level of Malang district
levies sector is high. A wide range of tourism attractions and other sectors
have many interesting levies to the public. Levies increased if there is a
holiday, it would affect the development of local revenue. Levies had a role
and expand along with local sources of revenue other elements. There are
many traditional markets in Malang district which is the source of such levies.
3. Result of wealth management is an area that separated elements of local
revenue sources. One of the most striking elements of the results separated
areas of wealth management is sourced from the taps. Most people have been
using PDAM Malang district as a means of clean water for daily needs, this
shows that the taps have helped contribute most of the elements of wealth
management results separated areas. This proves that the taps effect on local
revenue.
4. Other legal of local revenue is an element as a source of income for local
revenue. Sources of other legal of local revenue have increased every year. It
has been shown that elements of other legitimate income to support the
development of local revenue income. Began selling local assets, income
receipts on current accounts and income from loan repayments have a role as
a source of income for local revenue.

Research Methods
Location and Time of Research
The research was conducted in the district of Malang with the consideration
that the local revenue (PAD) Malang during the period of 2008 to 2012 in general
continues to increase, and local tax revenue as a component also has a relatively
important role on the sustainability of local governance and development. The study
period began in December until April 2013, which includes data collection and
literature, data processing, data analysis, writing up a report in the form of a thesis.

Type and Sources of Data

Type of study uses secondary data to the type of time series data taken from
the period of 2008 through 2012 for the potential tax value of the data contained in
the Malang district and the value realized of local revenue (PAD), local taxes, levies,
the operating profit areas, and other legitimate PAD contained in Malang. While the
secondary data used in this study were obtained from several sources, namely from
the publications of government agencies such as: Central of Statistical Bureau (BPS),
Dinas Pendapatan Pengelolaan Keuangan dan Aset (DPPKA) Malang district.

Methods of Data Collection

Data collection was performed by the method of documentation. The method
is to look for documentation or variable data on the form of notes, transcripts, books,
newspapers, magazines, inscriptions, minutes of meetings, agendas, and so on. The
data is obtained from official documents issued by the relevant agencies.
Method of Analysis and Data Processing
The method of analysis used in this research is descriptive analysis and simple
linear regression method.

Descriptive Analysis
According to Arikunto (2010), the descriptive research is conducted to
investigate the circumstances, conditions, situations, events, activities, etc. This
method is used to identify how much of tax from time to time in a series of data over
the period of 2007 until 2012. In addition, this method is also used to identify the
barriers faced by the Department of Revenue in the implementation of tax collection
in Malang District.

Classical Assumption
Using time series model in the regression model, there are several assumptions
that must be met to prove that the results of the regression equation meets the criteria.
Classical assumptions that must be met are:
a) Normality Test
Normality test is intended to detect whether the data that will be used as the
base starting hypothesis testing is empirical data that meets the naturalistic
nature. Test for normality using the Shapiro-Wilk SPSS. The test of the test
criteria will be determined as follows:
- Significance> 0.05, then the data are normally distributed.
- Significance <0.05, then the data distribution is not normal.
b) Multi-collinearity test
The test aims to test multi-collinearity between independent variables
included in the regression model has a linear relationship is perfect or near
perfect. From the results of SPSS, it can be obtained the value of tolerance
and the inflation factor (VIF) in the regression model.
According to Hair et al (in Priyatno 2008), variable that cause multi-
collinearity can be seen from the tolerance value which is smaller than 0.1 or
VIF value greater than the value of 10.
c) Autocorrelation Test
Autocorrelation is a correlation between the members of observations ordered
by time or place. Good regression models should not result in autocorrelation.
Method frequently used test is the Durbin-Watson test (DW test).
d) Heteroscedasticity Test
Heteroscedasticity is the differentiation of residual variance regression model.
Good regression in heteroscedasticity should not happen. Heteroscedasticity
test will be performed using the scatter plot, with the provision that if the
diagram on the scatter plot shows random pattern as the points are spread
above and below the 0 on the Y axis, then the existence of heteroscedasticity
does not happen

Multiple Linear Regression Methods

Multiple linear regression analysis is the relationship between one dependent
variable with two or more independent variables, Arikunto (2010). Regression
analysis to explain the relationship between dependent and independent variables is
closely related to statistical relationship that is, not the exact relationship. As a result
of the regression, showed a trend toward the average of the results of the same the
next measurement. Regression was used to develop an equation to predict a variable
of the second variable is known. For multiple regression equation is Y = + +
+ + + + + +ε
Where :
Y = Local Revenue
= Constants
- = Coefficient Regression
= Local Tax
= Levies
= Result of Local Wealth Management
= Other Legal of Local Revenue
ε = error term

Conclusions are achieved by two partial ways, by looking at the significance level of
the independent variable. Meanwhile, to see the effect with the analysis carried out
simultaneously with the coefficient of determination (R2) model.

Hypothesis Test
The forms of hypothesis testing in this study are as follows:
1) The F (simultaneous test)
This test is used to test the independent effect of the dependent variable
simultaneously. Testing is done through the F test or some variation by comparing the
F-calculated (Fc) with F-table (ft) at 5% significance level.
If the calculation results indicate:
a. Fc > Ft, or if the probability of error of less than 5%, then Ho is rejected and
Ha accepted. This suggests there is a significant effect of the independent
variable on the dependent variable.
b. Fc < Ft, or if the probability of error of more than 5% of the accepted and Ha
rejected H0. It showed no significant effect of the independent variable on the
dependent variable.
2) Test t (partial testing)
To examine the effect of the independent variable t test was used, which
serves to test the significance of linear partial regression coefficients. Testing is done
by t test comparing t-count with t-table at 5% significance level.
If the test results indicate:
a. t count > t table or if the probability of error of less than 5% then Ho is
rejected and Ha accepted, which means that the dependent variable can
explain the independent variable, and there is a significant effect between the
four variables tested.
b. t count < t table or if the probability of error of more than 5%, then Ho is
accepted and Ha rejected. This means that the independent variable can
explain the dependent variable and there was no significant effect between the
four variables tested.
Description

Local Tax Growth on Malang District

Local tax is the tax levied by local government and used to fund local
households. Along with the implementation of regional autonomy, each county has
the authority to manage their respective areas tax as a component of revenue which is
used to finance household areas concerned. Each region has its potential tax, as well
as with Malang district. The development and growth of local taxes is annually
owned by Malang Regency, which further could be seen in the table:
Table 1. Growth of Local Tax
Year Local Tax Growth of Tax Percentage

2008 30,357,571,883 - -

2009 33,782,874,886 3,425,303,003 11.28%

2010 39,362,653,309 5,579,778,423 16.52%

2011 64,689,653,942.25 2,532,700,063 64.34%

2012 71,301,888,447.01 6,612,234,505 10.22%

Based on the data in the table, it is clear that the potential local tax in Malang
area continues to increase each year from 2008 to 2012 is IDR 3,425,303,003 in
2009, IDR 5.579.778.423 in 2010, IDR 2,532,700,063 in 2011 and to IDR
6,612.234,505 in 2012. The types of taxes imposed on the time interval are hotel tax,
restaurant tax, entertainment tax, advertising tax, street lighting tax, tax collection
minerals category C, parking tax, swallow nest tax.
Local tax growth rate from year to year is also increasing. So that the
realization of increased point annually is noticed by the percentage rate of positive
developments. Local tax growth rate of 2008 to 2012 is 11.28% in 2009, 16.34% in
2010, 64.34% in 2011, and 10.22% in 2012. In 2011, the tax rate has experienced
growth in the local one which is larger than before before. This shows that the sector
for the local tax revenue in 2011 was very good.

Classical Assumption
Classical assumption has a four test. The test is normality test, autocorrelation
test, Multicolinearity test, heteroscedasticity test. The test itself is conducted by using
SPSS program.

Test for Normality

Results of calculations by using the Shapiro-Wilk SPSS are as follows:
 Table 2. Shapiro Wilk
Shapiro-Wilk
Statistic Df Sig.
Unstandardized Residual 0.169 10 0.704
Data output were processed with SPSS
The data would be better when using the Shapiro-Wilk, because the data
used were less than 15 data. The result of the test calculation is worth 0.704 with an
error rate of 7%. From these results it can be concluded that the error rate is more
than 5%, then the results of tests of normality has been mentioned that the data used
is normal

Autocorrelation test
A prerequisite that must be met is the absence of autocorrelation in the
regression model. Method frequently used test is the Durbin-Watson test (DW test)
with the test results as follows:
Table 3. Durbin Watson
Model Durbin Watson
1 1.821
Data output were processed with SPSS
Equation models are used to analyze the influence of the local tax revenue in
this Malang district has a value of Durbin-Watson statistic of 1.821, it is stated that
there is no violation of the autocorrelation because its value close to 2 so that the
model is free from boundary value problems autocorrelation between -2 to 2.

Multicolinearity test
Multicolinearity test is conducted by regressing VIF with all variables
included in the model.

Table 4. Collinearity Statistic

Collinearity Statistics
Model Tolerance VIF
- Local Tax 0.431 2.320
- Levies 0.669 1.495
- Result of Local Wealth 0.748 1.336
Management
- Other Legal of Local Revenue 0.631 1.586
Data output were processed with SPSS
Based on the estimation results of variables, it can be seen markedly that local
taxes, levies, part of operating income areas, and other revenue receipts if the VIF
value is below 10 so that the regression results indicate that there is no
multicolinearity in the model of local revenue (PAD).

Heteroscedasticity Test
Heteroscedasticity test has been used to plot a scatter diagram method as
follow table 5:
 Table 5

Scatterplot

Dependent Variable: Local Revenue

Regression Studentized Residual 2

-1

-2

-2 -1 0 1 2
Regression Standardized Predicted Value

From the results of table 5, a scatter plot diagram has been concluded. If the
point has been found spread in the diagram, then there is no heteroscedasticity.

Regression
From the results of multiple regressions, it will be known whether the local tax,
levies, result of local wealth management, and other legal of local revenue, are
essential to determine the effect on local revenue.

Table 5. Result of R Adjusted

Model R R Square Adjusted R Square
1 1.00 1.00 1.00
Data output were processed with SPSS
The table of results is adjusted R value of 1, which indicates the extent of the
role or contribution of variable local tax, levies, result of local wealth management,
and other variables can explain the legal revenue by 100% local tax.
Table 6. Regression
Model
B Probability Value
- Constant 0.065 0.458
- Local Tax 1.006 0.000
- Levies 1,016 0.000
- Result of Local Wealth 0.897 0.000
Management
- Other Legal of Local 0.998 0.000
Revenue
Data output were processed with SPSS
From the data processing or calculating in the data above, the obtained
regression equation models were significant, which are: Y = 0.065 + 1.006 + 1.016,
local tax levies result + 0.897 + 0.998, other wealth management of local revenue + e.
From the results of the regression equations above, it has the meaning that can be
interpreted as follows:
a) Constant = 0.065
It means that when the independent variables consist of local tax (XI), levies
(X2), result of local wealth management (X3), and other legal of local revenue
(X4) equal to zero or in a state of constant, then the amount of PAD in Malang
districts is about 2.69.
b) Local tax = 1.006
It means that if there is an increase to the local tax of 1%, it can increase the
local revenue of 1,006 in a state where other factors constant or zero.
c) Levies = 1.016
It means that if there is an increase of 1% of the levies, it can increase the
local revenue of 1.016 in a state where other factors constant or zero.
d) Result of Local Wealth Management = 0.897
It means that if there is an increase to the result of local wealth management
1%, it can raise the local revenue of 0.897 in a state where other factors are
constant or zero.
e) Other Legal of Local Revenue = 0.998
It means that if there is rise against other legal of local revenue by 1%, it can
increase the local revenue of 0.998 others in a state to be constant or zero.

Independent Sample T-Test

The second hypothesis test is a t-test, which is used to test the effect of partially
respective local tax variable (X1), levies (X2), result of local wealth management
(X3) and other legal of local revenue (X4) on the dependent variable local revenue
(Y).

From the table 6 above, the following results have been obtained:
a. Local Tax
From the results of the table above, it indicates that the significance of local
tax variable is 0.000, then the findings of the independent variable of the local
tax have had an influence on the dependent variable of local revenue, because
the significance value is 0.000 <0.05. Criteria HO in this test are rejected. So
it can be stated alternative hypothesis (Ha) which states that local variables
have an influence on local tax revenue in the Malang district.
b. Levies
From the results in the table above, the variable levies contribute the
significance of 0.000, then the findings of the independent variable levies
have had an influence on the dependent variable of local revenue, because the
significance value is 0.000 <005. Criteria HO in this test are rejected. So it
can be stated alternative hypothesis (Ha) that states that variable levies have
an effect on local revenue in the Malang district.
c. Result of local wealth management
From the results in the table 7 above, it has been known the significance result
of local management variable of is 0.000, then the independent variable of
 these findings as result of local wealth management has had an influence on
the dependent variable of local revenue, because the significance value is
0.000 <0.05. Criteria HO in this test are rejected. So it can be stated that
alternative hypothesis (Ha) which states variable result of local wealth
management has an influence on local revenue in the Malang district.
d. Other legal of local revenue
From the results of the table above, it presents the legal significance of other
variables of local revenue as 0.000, then the independent variable of the
findings of other legal of local revenue has had an influence on the dependent
variable of local revenue, because the significance value is 0.000 <0.05.
Criteria HO in this test are rejected. So it can be stated that alternative
hypothesis (Ha) which states other legal of local variable has an effect on
local revenue in the Malang district.

The Coefficient estimate

Principal component regression analysis results for the model equations,
show that the levies PAD had the greatest influence on the value of total revenue in
Malang districts when compared to the components that affect other PAD. The
second sequence that has the greatest influence on the value of total revenue in the
Malang district is local tax revenue component. The least influence in the Malang
district is a component of other revenue receipts. In the meantime, the third rank of
local taxes as a component of the PAD has significant influence on the total value of
PAD in Malang districts.

Conclusion and Suggestion

Conclusion
Based on the analysis and discussion of the results of the previous chapter on
the analysis of the effect of the local tax towards local revenue (PAD) Malang district
during the period of 2008 to 2012, it can be concluded as follows:
1. During the period of 2008 to 2012, the potential tax region in Malang district
continues to increase. Local tax increase has been described in the local tax rate of
growth each year. It has been shown that local tax sector has contributed a lot in
the reception area. Each year local tax sources have increased, it can be concluded
that any tax object and the business community has been growing every year.
2. During the period of 2008 to 2012, the rate of growth in the local tax increases to
2011. In 2012, it has shown the success in improving local government to local tax
revenue and the economy as well as the public sector in the district of Malang. The
existence of sporting events also supports the development of local tax revenue.
3. Local taxes show a positively significant effect on the value of PAD (Revenue) in
the Malang district with elasticity of 1.006, which means that if the local tax
increases by one percent, then the value of the total revenue receipts would
increase by 1.006 percent.
4. Local taxes provide a positive effect on local revenue, but the regression has
demonstrated that the local tax has the effect of second rank after the levies on
local revenue. Levies have elasticity of 1.0106 which means that if there is an
 increase of 1% of the levies, it can increase the local revenue of 1.016 in a state
where other factors show constant or zero.
5. There are many problems in facing local governments, including the District
Government of unfortunate, in this case of Dinas Pendapatan Pengelolaan
Kekayaan dan Aset (DPPKA) associated with achieving the realization of local
taxes so that the effect of local taxes to PAD in Malang District is still relatively
large, but it has greater effect compared to levies on PAD .

Suggestion
The author of this thesis could propose the suggestions to:
1. Improve quality and productivity performance of duties and functions of the
DPPKA Malang in service delivery to taxpayers.
2. Improve component of efforts in increasing the local taxes, by looking at the
results of regional tax revenues in 2012. This effort should be continued to be done
so that the number of admissions for the realization of the regional tax - can be
increased by the next year.
3. Improve control and monitoring more intensively and effectively to prevent or
avoid fraud both in the collection and management of Local Taxes. This is done to
suppress and prevent the misuse of tax revenue, and minimize the amount of
delinquent taxes from the taxpayer so that the number of local tax revenues can be
increased.
4. Develop the future studies in order to study the scope of knowledge of local tax
increases on the Malang district.
5. To recover the lack of data on the relevant agencies, such as the Dinas Pendapatan
Pengelolaan Keuangan dan Aset (DPPKA) expected to be input to be able to
manage and document the data with better and more comprehensive, because
given the importance of the data for a study.

Limitations
In conducting this studies the author / researcher has limitations, these limitations are:
1. This study has used the method of data collection documentation obtained from the
primary data. Data have been obtained from the DPPKA office because the data is
a bit of privacy, in which the researcher has limited the data to obtain a more
complete and detailed one.
2. This study has measured how much influence local taxes to local revenue, limited
to only in the Malang district. Due to the limitations of the researcher, the
researcher can not include the effect of local taxes to local revenue in the Malang
city.
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