REVENUE SHARING REFORMULATION IN INDONESIA TAXATION: RESOLVING VERTICAL FISCAL INEQUALITY?

Abstract

Revenue Sharing Reformulation (RSR) serves to reduce Vertical Fiscal Imbalance (VFI). The current RSR Indonesia formula is still unable to reduce VFI, so there needs to be a RSR reformulation. This research uses quantitative approach method to measure VFI before and after RSR reformulation. RSR Reformulation was obtained through literature review, then simulation was performed. The results of this study indicate that RSR reformulation considering fiscal needs, fiscal capacity, and regional efforts. The variables used in the RSR reformulation are population, equal share, poverty, land area, fiscal responsibility, personal emolument factor, and development factor.

Keywords

• Share revenue
• Vertical Fiscal Imbalance
• policy
• taxation
• simulation