On 21 August 2026, the West Java Provincial Government and the National Research and Innovation Agency (BRIN) launched a joint study to optimize Tax Revenue Sharing (Dana Bagi Hasil Pajak / DBH) for the province. The collaboration aims to identify untapped regional tax potential, improve DBH calculation methodologies, and align local revenue policies with national fiscal transfer formulas under Law No. 1 of 2022 on Financial Relations between Central and Regional Governments. BRIN will deploy econometric modeling, geospatial analysis of economic activity, and microsimulation of tax base elasticity to map revenue leakage in key sectors: property tax (PBB-P2), motor vehicle tax (PKB), and regional taxes on hospitality, entertainment, and advertising. West Java, as Indonesia’s most populous province, receives the largest DBH allocation nationally but faces persistent gaps between potential and realized collections due to data fragmentation across 27 regencies/cities. The study outputs will inform the 2027 Regional Revenue and Expenditure Budget (APBD) and feed into the Ministry of Finance’s DBH allocation formula review.
Key Takeaways
- Evidence-Based Fiscal Federalism: The BRIN partnership introduces rigorous analytics into DBH optimization, moving beyond historical allocation toward potential-based distribution.
- Subnational Tax Administration: Findings will drive integration of regional tax systems (SIPPAT) with DJP’s Coretax, enabling real-time data sharing on taxpayer economic activity across jurisdictional boundaries.
- Policy Feedback Loop: Provincial-level research feeds directly into central government formula reviews, creating a dynamic fiscal federalism model responsive to economic shifts.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement