Regional Financial Independence in Indonesia: The Role of Revenue Effectiveness, Fiscal Decentralization, and ICT
DOI:
https://doi.org/10.59966/ekalaya.v3i4.2853Keywords:
regional financial independence, regional revenue effectiveness, local tax revenue, fiscal decentralization, information and communication technologyAbstract
This study aims to analyze the effects of regional revenue effectiveness, local tax revenue effectiveness, and the degree of fiscal decentralization on regional financial independence, as well as to examine the role of Information and Communication Technology (ICT) as a moderating variable. This study employs a quantitative approach using secondary data from 38 provinces in Indonesia in 2024. The sampling technique used is saturated sampling, in which all 33provinces are included as research samples. Data analysis was conducted using EViews through panel data regression and Moderated Regression Analysis (MRA). The results show that regional revenue effectiveness has no significant effect on regional financial independence, while the degree of fiscal decentralization has a positive and significant effect. Local tax revenue effectiveness also has no significant effect on regional financial independence. Furthermore, ICT significantly moderates the effect of regional revenue effectiveness on regional financial independence by weakening the relationship, but does not significantly moderate the effect of local tax revenue effectiveness. In contrast, ICT strengthens the effect of fiscal decentralization on regional financial independence. These findings indicate that ICT is more effective in supporting regional fiscal independence when accompanied by stronger own-source revenue capacity and fiscal decentralization.
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