Analysis of Land and Building Tax in Palu City, 2018–2023

Abstract

This study aims to determine and analyze the effectiveness, the magnitude of the contribution, and the growth of Land and Building Tax revenue in Palu City during 2018–2023 by applying a qualitative descriptive method. The findings indicate the level of effectiveness of Land and Building Tax collection from 2018 to 2023. Based on the effectiveness standards established by the Decree of the Minister of Home Affairs (Kepmendagri), the Land and Building Tax in Palu City falls into the less effective category. The role of the Land and Building Tax within local tax revenue also remained very limited throughout the period. This condition resulted from the disasters faced by Palu City namely the earthquake, tsunami, and liquefaction of September 2018 which led to minimal Land and Building Tax payments, as well as economic stimulus measures in the following year in the form of the waiver of tax payments and tax penalties. The growth of Land and Building Tax revenue in Palu City shows a generally increasing trend, although its growth declined temporarily in the aftermath of the September 2018 disaster. The increase after 2022 was driven by improved payment realization as the permanent housing units built by the government at several locations in Palu City became occupied. The Land and Building Tax target consistently increased, influenced by the determination of the tax amount based on the Taxable Sale Value (TSV) of properties in the area.