GIS BUSINESS ISSN NO.

1430-3663
VOL 16 NO 1 (2021)

Analysis Of Land and Building Tax (Pbb) Performance As Source of Pad in

Pekanbaru

Syapsan1* Syafril Basri 2 Taryono3

1
Lecturer at Faculty of Economics and Business, University of Riau, Pekanbaru, Indonesia
E-mail: syapsan@lecturer.unri.ac.id (corresponding author)
2
Lecturer at Faculty of Economics and Business, University of Riau, Pekanbaru, Indonesia
E-mail: sybasri@yahoo.co.id
3
Lecturer at Faculty of Economics and Business, University of Riau, Pekanbaru, Indonesia
E-mail: taryono@lecturer.unri.ac.id

Abstract:
Regional autonomy having been implemented in Pekanbaru encounters obstacles in its implementation. It can
be recognized from the relatively limited amount of locally-generated revenue (Pendapatan Asli Daerah; PAD),
and its Regional Revenue and Expenditure Budget (APBD) is primarily dependent on the disbursement of funds
from the central government.
With the relatively limited total revenue of PAD in Pekanbaru, the efforts made by the government of
Pekanbaru to increase PAD are through intensification and extensification. This method of intensification and
extensification can be done because there is still tax evasion/avoidance (deterrence of the obligation to pay
taxes). Next, the tax potential in Pekanbaru has been unutilized, including in determining tax rates.
Land and building taxesare one of the sources of PAD in Pekanbaru, yet its realization did not reach the set
target.
This study aims at determining and analyzing the effect of tax service factors, tax payer awareness, extortion
and compliance on the performance of land and building taxes in Pekanbaru. This study employed secondary
data published by certain agencies and primary data which were the building owners amounted up to 120
people. The analytical tool utilized was Multiple Linear Regression (MLR) utilizing the Eviews 10 software.
The results showed the community did not understand the procedure of tax payment occurred because the tax
officers were late in notifying the tax bill.
The recommendations generated from this study are the government are expected to notify the tax bill well in
advance of the due date; the socialization regarding land and building taxes to the community is required and it
is necessary to prepare the requirements, tax payment procedures, tax payment due, and proof of payment for
PBB.
Key Words:
PAD, PBB, Performance, Service, Awareness, Extortion, Compliance

1 INTRODUCTION time the law concerning regional autonomy was issued in 1999. The
implementation only started in 2001
Officially, regional autonomy related to decentralization started in
January 2001. It means it has been running for 19 years. The first

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 Decentralization is an instrument for achieving the objectives of a The relatively small total revenue of PAD in Pekanbaru is the
state within the framework of national unity and a democratic state. effort made by the government of Pekanbaru to increase PAD by
What needs to be maintained is the balance between the intensification and extensification. This method of intensification
implementation of decentralization and the need to strengthen and extensification can be done because there is still tax
national unity and integrity. In the decentralization policy, there are evasion/avoidance (deterrence of the obligation to pay taxes). Next,
two primary objectives to be achieved, political and administrative the tax potential in Pekanbaru has been unutilized, including in
objectives (HAW, 2005). determining tax rates.
Then, in accordance with Law No. 32 and 33 of 2004 concerning Another effort developed by the government of Pekanbaru in
the comparison of central and regional finance in the framework of increasing its regional income is through a revolving and inherent
fiscal decentralization, regions are given the authority to utilize their mechanism in other PAD. For this reason, local government
own sources of funds, with the support of financial balancing funds cooperation with other parties outside of local government
between the central and local governments. As for the purpose of the institutions or other local governments is necessary. Therefore, new
aforementioned law, it is comprehensible that there is a separation of revenue sources can be levied; hence, PAD will increase. The
power (political sharing) and a separation of finance (financial achievement of the annual local tax revenue target in Pekanbaru is
sharing) between the central government and local governments. displayed in the following table:
In Law No. 32 and 33 of 2004, the Central Government will only TABLE1.
take care of certain fields including: Foreign affairs, Monetary, ACHIEVEMENT OF TARGET AND REALIZATION IN LOCAL
Fiscal, Defense and security, Justice and Religion. Apart from that is
TAX OF PEKANBARU
the authority of the Region. The central government disbursed funds
to local governments in the form of the General Allocation Fund Year Target Realization (%)
(Dana Alokasi Umum; DAU) and the Special Allocation Fund (Dana
2009 80,776,591,255 69,826,270,992 86.44
Alokasi Khusus; DAK). Otherwise, the Local Government also has a
source of revenue in the form of locally-generated revenue 2010 101,876,591,255 80,118,787,471 78.64
(Pendapatan Asli Daerah; PAD) and other legitimate Regional
2011 132,912,431,628 145,090,877,342 109.16
Income.
Therefore, regencies and cities do not depend on Financial 2012 192,666,120,379 221,990,528,940 115.22
Balance funds from the central government, but they must focus on
2013 246,630,736,744 245,975,924,302 99.73
increasing and exploring regional economic potential. With the
development of the regional economic potential, it will increase 2014 340,662,396,642 290,932,820,954 85.40
locally-generated revenue (Pendapatan Asli Daerah; PAD) as a
2015 595,142,075,491 357,365,525,616 58.86
source of development funds and have a major contribution to
regional development. 2016 537,699,452,843 390,323,492,883 72.59
Regional autonomy having been implemented in Pekanbaru 2017 783,260,371,972 491,289,420,935 58.86
encounters obstacles in its implementation. It can be recognized from
the relatively limited amount of locally-generated revenue 2018 847,384,410,838 499,029,402,789 58.86
(Pendapatan Asli Daerah; PAD), and its Regional Revenue and Source: Regional Revenue Agency (Bapenda) of Pekanbaru,
Expenditure Budget (APBD) is primarily dependent on the 2019
disbursement of funds from the central government. It will become
an obstacle affecting the implementation of regional autonomy in the Based on the table above, it can be perceived that the
future. According to Tambunan (2001), From the New Order era to achievement of the realization target does not achieve the target
the implementation of Regional Autonomy (OD), the financial almost every year. The achievement of the realization target occurred
relationship between the Central and Local Governments was the in 2011 amounting to 109.16 percent and in 2012 amounting to
cause of the small function of PAD in the Regional Revenue and 115.22 percent. In 2017, the realization achieved was exceedingly
Expenditure Budget (APBD). It is what causes the government's lower than the target that should have been achieved, and in 2016,
dependence on the central government. the realization achieved increased from the previous year.

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 One of the tax sources in Pekanbaru is Land and Building Tax, in contribution of land and building taxes as local taxes to locally-
which the realization fluctuates, and the target achievement is not generated revenue (PAD).
according to the plan. The revenue achievement development of land According to Harinurdin, E, (2009, low tax ratio is related to two
and building tax from year to year can be seen in the table below: things:
TABLE2. 1. Low Tax Compliance; hence, the amount of tax collected
ACHIEVEMENT OF TARGET AND REALIZATION IN LAND AND BUILDING becomes small when compared to the tax base.
TAX OF PEKANBARU 2. Low tax collection leads to further increases in tax revenue
Year Target Realization (%) targets.
Taxpayers in paying taxes still need to be reminded by the
2009 35,472,602,903 24,459,153,534 68.9 officers of Regional Revenue Service (Dispenda); the sanctions are
2010 38,338,295,203 30,614,821,549 79.85 less strict so that taxpayers often delay payment times. According to
the Theory Planned Behavior, compliance behavior is predicted by
2011 33,987,789,921 36,614,821,549 106.34 three predictors: attitudes, subjective norms and perceptions of
control behavior.
2012 38,500,000,000 41,047,966,395 106.618
In addition, based on the results of previous research by Sonny M.
2013 42,025,371,685 38,348,010,031 91.25 Ikhsan M (2012), it explains that PAD has a connection with public
awareness, security, extortion, human resources and natural
2014 51,746,624,037 41,999,306,880 81.16
resources, reaching 67%.
2015 127,390,009,150 58,234,415,203 45.71 In addition, based on the results of previous research on tax
performance as stated by Kariyoto (2011), the role of tax reform, tax
2016 104,212,342,760 60,446,308,650 58.00
auditing, taxpayer compliance in increasing tax performance has
2017 104,212,342,806 60,868,387,186 58.41 proven effective. The role of tax reform, tax audit, and taxpayer
awareness has also proven to be effective in increasing tax
2018 191,765,016,227 66,207,610,973 34.53 performance.
Source: Regional Revenue Agency (Bapenda) of Pekanbaru, According to Boediono (2003), taxation service is a process of
2019 assistance to others in certain ways requiring sensitivity and
From the table above, we can see that from 2009 to 2011, the interpersonal relationships to create sensitivity and success.
percentage of realization achievement has increased, but from 2012 According to Suryadi (2006) and Surjadi (2012), tax service was
to 2016, the realization achievement has decreased. In 2017, the studied through four dimensions, namely:
realization decreased drastically amounted to 34.53 percent from a. The quality of human resources, the quality of the tax authorities
2018. The estimated target set is also very far from the results of its greatly determines the effectiveness of the implementation of
realization. laws and regulations in the field of taxation. When it is related to
Law No. 28 of 2009 describes that Local Taxes of Regency/City the optimization of tax revenue targets, the tax authorities must
are: Taxes on hotels, restaurants, entertainment, billboards, street be people who are competent in the field of taxation, and they
lighting, non-metallic minerals and rocks, parking, underground have technical skills and have high morals. Based on formal
water, swallow's nests, rural and urban land and building tax (PBB) education,
and fees for acquisition of land and building rights. b. Tax provisions with developments in the economy, international
Objects for Rural and Urban Land and Building Tax (PBB) are trade, information technology and other aspects, amendments
land and or buildings owned, controlled and/or utilized by private have been made to the tax law. Amendments made in tune with
persons or entities, except for areas used for plantation, forestry internal and external factors affecting and affected. Provisions
and/or mining business activities. must be made as well as possible; hence, they can be understood,
applied by taxpayers and have a good impact after issuance, such
The above phenomena indicate the low performance of land and
as: understandable, can be readily operated and have a good
building taxes in Pekanbaru, which is the decline in the relation and
impact after being issued.

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c. Tax information system to accurate data, speed and streamline
work, the Directorate General of Taxes then the Geographic
Information System (System Informasi Geografi; SIG) and the
Tax Object Information Management System (System
Manajemen Informasi Objek Pajak; SMIOP) at Land and
Building Tax Service Office (Kantor Pelayanan Pajak Bumi dan
Bangunan; KPPBB). To support the improvement of tax services,
changes in the use of information technology and information
systems have been made. Currently, the application of the
information system is the Directorate General of Taxation
Information System (Sistem Informasi Direktorat Jendral Pajak;
SIDJP) which is based on the latest technology. All work flows
are in the path of SIDJP with case management, such as: service
procedures, data accuracy, work speed and smooth operation.
d. Organizational Culture these are the values generally believed to
affect individual performance behavior and to achieve long-term
objectives of an organization.
Tax awareness is when a taxpayer is aware of paying taxes when
she/he has a positive perception of taxes, has sufficient knowledge of
taxation, has compliant characteristics and has received adequate
education (Suryadi, 2006). Tax awareness is:
a. When taxpayers are aware to pay taxes, such as: taking the time,
reporting and depositing.
b. They possess a positive perception of taxes, such as taxes for
development, for government financing, for welfare.
c. They possess sufficient knowledge about taxation, such as: tax
object, tax subject, tax rate, payment time, tax procedure and tax
breach risk
d. They possess compliant characteristics, such as: taking notes as
is, calculating according to regulations and discipline.
e. They have received adequate counseling, such as: seeking it
yourself, from the government and the media
Extortion is asking for something (money, etc.) from land and
building taxpayers without any regulations on which to base them.
Extortion starting from the context of variable transaction costs at the
company level, the categorization carried out by Strassmann (in
Yustika, 2008) is quite helpful as study material.
According to Soewartojo, J, 1995, extortion is types of illegal
levies imposed by local governments, namely extortion carried out
without stipulation based on regional regulations, still only with
decrees and from the security apparatus and also mass organizations
justified in maintaining security, administration fees, transaction
fees, parking fees, and crowd fees.
a. Administration is a form of guarantee provided by unscrupulous
officers to reduce taxes.
b. Transaction costs are costs incurred unofficially when the tax
administrator to the government, and it is done to facilitate the
settlement of these affairs.
Compliance is a rational and planned attitude of behavior in doing
so, in this case paying taxes, in accordance with the theory of
planned behavior.
Azjen (2005) in Wong (2012) explains there are 3 main
predictions affecting a personal desire to do an action, namely:
attitude toward the behavior, subjective norms, and perceived
behavioral control.
Fishbein and Azjen (2005) in Wong (2012), explain theory of
planned behavior based on an approach to beliefs that can lead to an
individual's desire to perform certain actions. Approaches to beliefs
carried out by grouping various properties, qualities, and attributes
based on existing information, which ultimately unplanned will form
the desire to behave. Specific behavior carried out by individuals
specifically contained in the approach of theory of planned behavior.
According to Nurmantu (1992), taxpayers have compliance to the
point of view of rights and obligations and law enforcement.
Subsequently, according to Kariyoto (2011), the compliance of
taxpayers is the condition of taxpayers to pay taxes due to the
existence of law enforcement, tax compensation, the obligation of
people who already have income above non-taxable income
(Penghasilan Tidak Kena Pajak; PTKP) to have a Tax Identification
Number (Nomor Pokok Wajib Pajak; NPWP), the obligation to
submit Notification Letter (Surat Pemberitahuan; SPT).
Simon in Gunadi (2005) explains the compliance of taxpayers is a
Taxpayer who voluntarily pays their tax obligations. It is in which
the payment of taxes must follow the rules having been established
without any inspection, obtrusive investigation, warnings, threats,
and the application of both legal and administrative sanctions.
According to Norman in Zein, M (2005), indicators of tax
compliance include: timeliness, data accuracy and tax sanctions.
Based on the theoretical basis framework and the results of
previous research above, it can be synthesized that the performance
of land and building taxes is affected by taxpayer compliance, tax
services, taxpayer awareness and illegal levies (extortion). From the
description foregoing, it is necessary to conduct a study focusing on
the land and building tax of the Government of Pekanbaru to
discover whether the tax service factors, taxpayer’s awareness,
extortion, and compliance affect the performance of PBB in
Pekanbaru or not?
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 Based on the problem formulation having been raised above, the
research objective of this study is to identify and analyze the effect
of tax service factors, taxpayer awareness, illegal fees (extortion) and
compliance on the performance of land and building taxes (Pajak
Bumi dan Bangunan; PBB) in Pekanbaru.
2 METHOD OF THE IMPLEMENTATION
The Research on the Analysis of locally-generated revenue
(Pendapatan Asli Daerah; PAD) sourced from land and building
taxes in 12 sub-districts in Pekanbaru.
population in this study was 265 people. To conduct this research,
a substantial population of samples was represented using purposive
random sampling. Observing the substantial number of existing
populations, especially the number of taxpayers, the researchers
collected the sample utilizing the incidental sampling technique,
which is the determination of the sample based on chance, that is,
anyone who randomly happens to meet the researcher when the
person is considered a suitable data source. For the taxpayers, the
writer selects the sample to consider the accuracy limit that can
affect the sampling error of the population with the Slovin formula.
Therefore, it can be stated that there are 120 taxpayers out of a
population of 265,000 people spreading over twelve sub-districts, of
which 10 samples are taken in each sub-district.
This study uses secondary and primary data obtained from
government agencies, related agencies and other relevant sources.
Data collection techniques used were survey techniques,
interviews, documentation and literature study. Concurrently, the
tools utilized to collect research data were interview techniques and a
questionnaire.
Nevertheless, documentation is recorded data, both in the form of
reports and other forms, like target and realization reports of locally-
generated revenue, related regional regulations, organizational
structure, job descriptions of employee development reports,
development of facilities and infrastructure, population development,
regional economic growth and others.
Research variables can be grouped into several categories based
on their position in cause and effect relationships in research and
measurement. Based on the causal relationship in the study, the
research variables were categorized into two groups, namely the
exogenous (independent variables) and endogenous (dependent
variables). By using the conceptual framework of the research that
has been formulated, the exogenous variables in this study are
Taxation Services, Taxpayer Awareness, Illegal Levies and
Compliance of endogenous variables.
This study used a Likert scale, scoring 1 to 5. A score of 1 means
'strongly disagree' or 0% (for intensity) or 'very unsure' (for a level of
confidence), a score of 2 means 'disagree' or 'not sure', a score of 3
means 'doubtful', a score 4 means 'agree' or 'sure', a score of 5 means
'strongly agree' or 'very sure'.
For the purposes of collecting data in the field, media are
provided in the form of research instruments, namely questionnaires
to collect quantitative data. The questionnaire was compiled by
describing various definitions of observed variables that were
identified earlier in the form of sentences that were easy to
understand and had to be structured.
This study used quantitative methods. A descriptive statistical
approach was used to explain the characteristics of respondents
using. Descriptive statistic was used to describe and illustrate the
object under study through sample data. Presentation of data in
frequency tables and graphs is intended to make it easier to
understand the results relating to the answer of the research
objectives.Whereas to answer the research objectives, Eviews was
used analysis of a relationship and influence.
3 RESUTS AND DISCUSSIONS
3.1 Result
This research employing quantitative analysis uses Eviews 10 as
a tool in calculating the level of performance of land and building
taxes as a source of locally-generated revenue in Pekanbaru. There
are several factors affecting it, namely the level of land and building
tax socialization, in which when the socialization provided is not
optimal, it certainly affects public awareness willing to pay land and
building taxes. In addition, the level of public awareness also greatly
affects the level of public compliance in paying land and building
taxes. People who do not feel aware paying taxes is an obligation, of
course, will reduce government revenue in the land and building tax
sector.
In this study, a sample of 120 respondents was selected at
random. Then, the data obtained from the respondents were tabulated
into Excel for later statistical tests to be carried out to see the effect
between service, awareness, extortion, compliance and the
performance of land and building taxes. The data obtained from
service, awareness, extortion, compliance and performance of land
and building taxes can be seen in the attachment.
Therefore, we can find out the effect of service, awareness,
extortion, and compliance on the performance of land and building
taxes. Statistical calculations are carried out using the Multiple
73
Linear Regression (MLR) analysis method with OLS techniques
using Eviews 10 software.
1. Classic Assumptions (Best Linear Unlimited Estimator)
This classic assumption test aims at determining the biased data
to be analyzed. There are 4 tests in the classical assumptions,
namely: Normality, heteroscedasticity, autocorrelation,
multicollinearity.
a. Normality
This test is conducted with the aim to assess the distribution
of data on a variable, whether the data distribution is
normally distributed or not.
Figure 1. Result of Normality Test
Source: Processed Data by Eviews 10
Based on Figure 4.1, the probability value is 0.823994 or 8%
which is greater than 0.05 or 5%. Therefore, the research data
is concluded to be normally distributed.
b. Multicollinearity
This test is conducted to determine the relationship between
independent variables. Acceptable data is data that has no
relationship between independent variables. Testing can be
done with Variance Inflation Factor (VIF) where if the value
of VIF is less than 10, it can be said that the independent
variables do not affect each other or are free from
multicollinearity. It can be seen in the following figure:
Figure 2. Variance Inflation Factor
Source: Processed Data by Eviews 10
c. Heteroscedasticity
This test is carried out to determine the data to avoid
interference that does not produce BLUE (Best Linear
Unbiase Estimator). This test can be done with the White Test
which if the value of obs*R-Square prob. Chi-Square > 0,05
or 5%. For more details can be seen in the following figure
Figure 3. The result of Heteroskedasticity Test White
Source: Processed Data by Eviews 10
Based on Figure 4.3 above, it can be seen that the value of
obs * R-Square prob Chi-Square is 0.5621 or 5.62% which is
greater than 5%. Hence, it can be said that the data in this
study are not affected by heteroscedasticity.
d. Autocorrelation
This test is conducted to determine whether there is a
correlation between data in one variable. This test can use the
Breusch-Godfrey Serial Correlation LM Test where if the
value of obs*R-Square prob. Chi-Square is greater than 0.05
or 5%, so the data is said to pass the autocorrelation. It can be
seen in the following figure:
Figure 4. Breusch-Godfrey Serial Correlation LM Test
Source: Processed Data by Eviews 10
Based on Figure 4.4, on the Breusch-Godfrey Serial
Correlation LM Test, if the value of obs*R-Square prob. Chi-
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 Square showing 0.0678 or 6.78 % is greater where than 0.05
or 5%, the data are can said to tests pass autocorrelation.
2. Statistics Test
This test consists of the coefficient of determination (R2), F-test
and t-test. The results of the analysis of each test can be seen in
the following data:
Figure 5. The Result of Regression
Source: Processed Data by Eviews 10
a. Determination Coefficient (R2)
The coefficient of determination (R2) aims at finding out how
much the independent variable influences the dependent
variable. Based on data analysis, it is known that the value of
R2 seen in Adj. Of R-Square was 0.471113 or 47.11% which
means that the independent variable affects the dependent
variable by 47.11%, while the remaining 38.95% is
influenced by other variables not examined in this study.
b. F-test
This test is conducted to determine the effect of the
independent variables which are Service, Awareness, Illegal
Levies (Extortion), and Compliance simultaneously affect the
independent variables. The data analysis is said to have an
influence simultaneously if the Prob (F-statistic) value is less
than 0.05. In the data analysis, the Prob values (F-statistics)
obtained was 0.000000 less than 0.05 or 5%, thus it can be
said that Service, Awareness, Illegal Levies (Extortion), and
Compliance simultaneously affect the performance of land
and building tax significantly.
c. T-test
This test aims at determining the effect of Service,
Awareness, Illegal Levies (Extortion), and Compliance
separately. The variable is said to have a separate effect on
the dependent variable if the probability value is smaller than
0.005. Here are the results of the t test:
1. Based on the results of data analysis, X1 (service) has a
probability value of 0.0001 which is smaller than 0.05, so
it can be said that service has an effect on the
performance of land and building taxes partially.
2. Based on the results of data analysis, X2 (Awareness)
with a probability value of 0.1166 which is greater than
0.05, so it can be said that the awareness variable
separately does not affect the performance of land and
building taxes.
3. Based on the results of data analysis, X3 (Extortion), the
probability value of illegal levies is 0.0541 greater than
0.05, so it can be said that the variable of illegal levies
(extortion) separately has no effect on the performance of
land and building taxes.
4. Based on the results of data analysis, X3 (Compliance)
with a compliance probability value of 0.0001 which is
smaller than 0.05, so it can be said that the compliance
variable separately affects the performance of land and
building taxes.
3. Accuracy Test of Parameter Signs
This test aims at determining the accuracy of the theory with the
results of data analysis. The results of the analysis of the
accuracy of the parameter signs can be seen in this following
figure:
Figure 6. The result of Analysis on Accuracy of Parameter Signs
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Source: Processed Data by Eviews 10 Source: Processed Data by Eviews 10
Based on Figure in above, the results of data analysis with From the figure above, it can be concluded that the most
Multiple Linear Regression method can be seen as follows: dominant component of the procedure is the effectiveness
PERFORMANCE = indicator with a coefficient value of 0.36.36%, the efficiency
indicator with a coefficient value of 27.27%, and the
0.296800051417+ (0.38560205221 x SERVICE) +
economic indicator and strategic plan with the same
(0.141181161221 x AWARENESS) +
coefficient value of 18.18%.
(0.108901571262 x EXTORTION) +
b. Dominant Factors of Performance Variables
(0.42671731721 x COMPLIANCE)
In Figure 4.7 below, it explains what components are most
Based on the above equation, the relationship between Service, dominant in affecting the performance variable.
Awareness, Illegal Levies (Extortion), and Compliance on
Performance is Positive. It explained that the higher the Service,
Awareness, Illegal Levies (Extortion), and Compliance, the
higher the Performance will be.
From the results of the above equation through the statistical
analysis of the accuracy of the parameter sign, it is known that
Performance will be increased by the existence of Service,
Awareness, Illegal Levies (Extortion), and Compliance thereby
increasing the performance of land and building tax in
Pekanbaru.
a. Dominant Factors of Performance Variables
In Figure 4.7 below, it explains what components are most
Figure 8. Dominant Factors of Service Variables
dominant in affecting the performance variable.
Source: Processed Data by Eviews 10
From the picture above, it can be concluded that the tax
information system indicator is the most dominant affecting
service variable with a coefficient value of 36.36%, while the
least dominant one is the quality of human resources and
organizational culture with the same coefficient value of
18.18%.

c. Dominant Factors of AwarenessVariables

In Figure 4.9 below, it explains what components are most
dominant in affecting the awareness variable.

Figure 7. Dominant Factors of Performance Variables

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 Figure 9. Dominant Factors of Awareness Variables
Source: Processed Data by Eviews 10
From the figure above, it can be seen that all the components
affect each other. The Indicators of Awareness to Pay,
Perception, Knowledge, Characteristics, and Counseling have
the same effect in affecting the awareness variable with a
coefficient value of 17.65%, and the indicator of Tax Rate
which is the least dominant indicator affecting the awareness
variable is the tax rate with a coefficient value of 11.76%.
d. The dominant factor of illegal levies (extortion) variable
In the illegal levies (extortion)variable, there are two
indicators included in the variable, which are administrative
indicators and transaction costs. It will be explained in the
following figure 4.10:.
Figure 10. Dominant Factors of Illegal Levies (Extortion)
Variables
Source: Processed Data by Eviews 10
From the figure above, it can be concluded that the
administrative indicator is more dominant in affecting the
extortion variable with a coefficient value of 60% when
compared to the transaction cost indicator with a coefficient
value of 40%.
e. Dominant Factors of Compliance Variables
In Figure 4.11 below, it explains what components are most
dominant in affecting the compliance variable.
Figure 11. Dominant Factors Compliance Variables
Source: Processed Data by Eviews 10
From the picture above, it can be concluded that all affects
each other, and the indicator that is the least dominant in
affecting the awareness variable is official levies with a
coefficient of 18.18%.
3.2 Discussion
From the description with regard to taxpayer compliance in
paying land and building taxes in Riau Province, especially in
Pekanbaru, it proves several evidences and its relation to the
performance of Land and Building Tax which can be described from
the following description.
1. The Effect of Services on the Performance of Land and Building
Tax
From the data analysis, it shows that taxation services have a
significant effect on the performance of land and building taxes
in Pekanbaru. This condition is in line with the results of research
conducted by Sulistiawati (2012).
These results prove that improving the quality of human
resources at taxation agencies, transparency of tax provisions,
improving taxation information system technology by
implementing a computerized system and creating a good
organizational culture will immediately improve the quality of
service to taxpayers.
2. The Effect of Awareness on the Performance of Land and
Building Tax
The results of data analysis indicate that taxpayer awareness has
no effect on the performance of land and building taxes. The
results of this study are in line with what was conveyed by
Kariyoto (2012), but in research conducted by Sulistyawati
(2012), Taxpayer Awareness has a significant effect on tax
performance.
This finding provides an answer that the indicator of awareness
to pay, perceptions, knowledge, characteristics, and counseling
and tax rates do not guarantee taxpayers have the awareness to
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 pay taxes. It is because proof of payment of PBB is one of the
requirements in managing other public service administration.
3. The Effect of Illegal Levies (Extortion) on the Performance of
Land and Building Tax
From the results of data analysis, it can be seen that the illegal
levies (extortion) imposed both in administrative costs and in
transaction costs have no effect on the performance of land and
building taxes. The results of this study are not in line with what
was conveyed by Pradini, H. S., Ratnasari, M., & Hidayat, T. E.
W. (2016); Devos, K. (2013); Jimenez, P., & Iyer, G. S. (2016);
It is because in the land and building tax payment system in
Pekanbaru. The officer comes to the taxpayer to deliver a tax
payment notification through RT and RW with the amount of
payment specified in the tax return in a transparent manner, and
the officers have been given tax collection wages. However, in
the case of submitting the Tax Return, there is often a delay and
incorrect submission of the Taxpayer
4. The Effect of Compliance on the Performance of Land and
Building Tax
From the results of data analysis, it can be seen that compliance
has a significant effect on the performance of land and building
taxes. The results of this study are in line with what was
researched by Kariyoto (2012) and Sulistyawati (2012). It
confirms that increasing punctuality in payments, accuracy of
submitted data, law enforcement by providing tax penalties and
official levies will improve tax performance.
4 CONCLUSIONS AND SUGGESTIONS
4.1 Conclusion
From the description above, several conclusions can be drawn to
improve the performance of land and building taxes which will play
an important role in increasing Locally-generated Revenue (PAD) in
Riau Province.
1. Services have a positive effect on the performance of Land and
Building Tax in Pekanbaru. It is where the improvement of the
quality of human resources in taxation agencies, transparency of
tax provisions, improvement of tax information system
technology by implementing a computerized system and creating
a good organizational culture will immediately improve the
quality of service to taxpayers.
2. Taxpayer awareness does not have a significant effect on the
performance of land and building taxes (PBB). It is due to
compulsion where the payment of PBB is one of the
requirements in managing the administration of other public
services.
3. Extortion levied both in administrative and transaction cost have
no effect on the performance of Land and Building Tax in
Pekanbaru. It is because in the Land and Building Tax payment
system in Pekanbaru, the officer comes to the taxpayer to deliver
a tax payment notification via RT and RW with the amount of
payment specified in the tax return in a transparent manner, and
the officers have been given tax collection wages. However, in
the case of submitting the Tax Return, there is often a delay and
incorrect submission of the Taxpayer
4. Compliance have a positive effect on the performance of Land
and Building Tax. It confirms that increasing punctuality in
payments, accuracy of submitted data, law enforcement by
providing tax penalties and official levies will improve tax
performance.
4.2 Suggestions
Based on the results and discussion that has been carried out in
this study, the suggestions given are as follow:
1. Local governments need to submit tax invoices well in advance
of the due date.
2. To increase public awareness of paying taxes, it is necessary to
prepare requirements, tax payment procedures, due date of tax
payments, on the back of proof of payment of PBB.
3. Local governments need to disseminate sanctions or fines to the
home owner community.
4. In an effort to increase taxpayer knowledge, local governments
need to cooperate with sub-district heads and village heads in
socializing land and building taxes or land and building tax raids.
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