The Contribution of the Manufacturing Industry Sector to Local Taxes Revenue: Evidence in the Bakorwil Purwakarta Area, Indonesia

Dede Jajang Suyaman (), Gusganda Suria Manda and Mochamad Faizal Rizki
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Dede Jajang Suyaman: Universitas Singaperbangsa Karawang
Gusganda Suria Manda: Universitas Singaperbangsa Karawang
Mochamad Faizal Rizki: Universitas Singaperbangsa Karawang

A chapter in Proceedings of the 10th Padang International Conference on Education, Economics, Business and Accounting (PICEEBA-10 2022), 2025, pp 264-276 from Springer

Abstract: Abstract The manufacturing sector has the potential for a vast regional tax base and broad impacts on the regional economy. It is because the sector operates various supply chain management activities. The study purposed to analyze the contribution of the manufacturing industry growth to local tax revenues in the Bakorwil Purwakarta area, Indonesia. The analysis method used the econometric method based on panel data analysis, involving data from 5 regencies and municipality from 2001 to 2021. The results showed that the manufacturing sector’s growth contribution did not significantly affect local tax revenue. It is assumed that most of the sector’s tax contributions are a type of tax collected by the central government. Local governments had yet to fully maximize local taxes’ potential, particularly the manufacturing sector’s potential tax base. For this reason, local governments should carry out tax reforms on an ongoing basis, among others, through improving tax administration, increasing human resource capacity, and preparing tax evaluation studies.

Keywords: Manufacturing Sector; Multiplier Effect; Local Taxes; Panel Data Analysis (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-839-4_23

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DOI: 10.2991/978-94-6463-839-4_23

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