SURAKARTA — Better accounting systems, clearer financial reporting, and stronger public engagement can help improve taxpayer compliance in Surakarta, according to a 2026 study by Tamam Rosid, Sarsiti Sarsiti, Cicilia Puji Rahayu, Rohwiyati Rohwiyati, Praptiestrini Praptiestrini, and Dewi Pujiani. Tamam Rosid is affiliated with Muhammadiyah University of Berau, East Kalimantan, while Sarsiti Sarsiti, Cicilia Puji Rahayu, Rohwiyati Rohwiyati, Praptiestrini Praptiestrini, and Dewi Pujiani are affiliated with University of Surakarta. The researchers examined Surakarta’s regional financial management and tax administration, with fieldwork conducted from August 2024 to January 2025. Their findings highlight the importance of connecting financial information, transparency, and taxpayer services to strengthen regional revenue.
Why Tax Compliance Matters for Local Governments
Regional autonomy has increased the responsibility of Indonesian local governments to generate and manage their own revenue. Local taxes are an important part of this system because they help finance public services and reduce dependence on transfers from the central government.
The researchers note that tax revenue accounts for around 65–70 percent of locally generated revenue across Indonesian municipalities. This makes effective tax collection and taxpayer compliance important elements of regional fiscal sustainability.
Surakarta provides an important example. The city has introduced digital government initiatives and participatory mechanisms, but its regional government continues to face challenges in maximizing tax revenue. According to the financial data cited in the article, total regional revenue increased from IDR 1.782 trillion in 2023 to IDR 1.874 trillion in 2024, while tax revenue rose from IDR 445 billion to IDR 478 billion.
The study argues that increasing revenue is not only a matter of collecting more taxes. The quality of financial information, accessibility of government data, public trust, and the ease of paying taxes also influence compliance behavior.
Researchers Interviewed 32 Stakeholders
The researchers used a qualitative approach to examine how accounting practices, transparency, and tax compliance interact in Surakarta.
The study involved 32 participants representing different groups within the regional financial system:
- 8 officials from the Regional Revenue Agency;
- 6 financial management staff;
- 4 internal auditors from the Regional Inspectorate;
- 10 registered taxpayers from sectors including hospitality, commerce, and property; and
- 4 civil society representatives involved in monitoring budget transparency.
Researchers conducted semi-structured interviews lasting between 45 and 90 minutes. They also examined audited financial statements, regional revenue reports, budget realization documents, transparency assessments, and tax collection statistics from 2023 and 2024. The information from interviews and official records was compared to identify consistent patterns.
This approach allowed the researchers to look beyond tax collection figures and examine how government financial management is experienced by officials, taxpayers, and civil society representatives.
Tax Compliance Improved, but Gaps Remain
The financial indicators presented in the study show improvement in several areas between 2023 and 2024.
The realization rate of regional tax targets increased from 87.6 percent to 89.3 percent. Property tax compliance increased from 64.2 percent to 67.3 percent, while hotel and restaurant tax compliance rose from 81.4 percent to 83.7 percent.
The researchers also found substantial differences in the use of digital tax services.
In 2024, only 34 percent of property tax transactions were conducted through digital channels. By comparison, approximately 71 percent of hotel and restaurant tax transactions used digital channels. The difference suggests that digital readiness, taxpayer characteristics, and the nature of tax administration can affect the adoption of online services.
The findings suggest that digitalization can make tax administration more convenient, but technology alone does not automatically guarantee stronger compliance.
Transparency Means More Than Publishing Documents
One of the study’s central findings concerns the way governments communicate financial information.
Surakarta operates a regional financial transparency portal that provides access to approved budgets, quarterly realization reports, and procurement information. However, the portal recorded an average of only around 1,200 visitors per month, equivalent to approximately 0.23 percent of the city’s population.
The researchers identified several possible reasons for the limited engagement, including complex financial information, limited data visualization, and insufficient promotion of the portal.
For citizens, simply making a financial document available online does not necessarily make the information useful. People need information presented in a format they can understand and connect with everyday public services.
The researchers therefore distinguish between technical transparency and functional transparency. Technical transparency involves making information formally available, while functional transparency focuses on whether citizens can actually understand and use that information.
Trust Plays an Important Role in Tax Compliance
Interviews with taxpayers showed that perceptions of government responsiveness and public services were closely connected to their willingness to comply with tax obligations.
Seven of the 10 taxpayer participants expressed concerns about the integrity of budget management. At the same time, taxpayers who experienced efficient services, clear communication, and responsive administration showed stronger tendencies toward compliance.
The researchers from Muhammadiyah University of Berau and University of Surakarta describe transparency as both an accountability mechanism and a trust-building tool.
Their analysis suggests a broader relationship:
Better accounting → clearer financial information → stronger transparency → greater public trust → stronger voluntary tax compliance.
The authors emphasize that this relationship depends on how financial information reaches citizens. Highly technical financial statements may satisfy formal reporting requirements but have limited value if ordinary taxpayers cannot understand them.
Accounting Systems Still Need Stronger Integration
The study also examined Surakarta’s regional accounting infrastructure. The city introduced the Regional Financial Management Information System (SIPKD) in 2019 to support financial transaction recording and reporting. However, the researchers identified integration gaps between revenue collection, expenditure management, and asset accounting.
Surakarta's 2024 financial audit received an unqualified opinion, indicating general compliance with accounting standards. At the same time, the study reports 14 internal-control weaknesses identified through the audit, including issues involving fixed-asset records, reconciliation procedures, and supporting documentation for some revenue transactions.
The findings indicate that adopting accounting standards is only one part of financial reform. Local governments also need skilled personnel, integrated technology, reliable data, and effective coordination among agencies.
Implications for Local Financial Management
The researchers recommend an integrated approach rather than treating accounting, transparency, and tax collection as separate administrative functions.
Their recommendations include:
- strengthening professional development for regional financial personnel;
- improving integrated financial information systems;
- connecting revenue, expenditure, and asset management data;
- presenting financial information through clearer narratives and data visualizations;
- expanding meaningful public participation in budgeting;
- simplifying taxpayer procedures;
- improving the reliability of digital tax services; and
- strengthening communication between government agencies and taxpayers.
For citizens, clearer financial information can make it easier to understand how public funds are managed. For local governments, better-integrated systems can support planning and monitoring. For taxpayers, simpler procedures and more reliable digital services can reduce administrative barriers.
The researchers also caution that the findings are specific to Surakarta because the study used a qualitative design focused on the city’s institutional context. They recommend future research involving multiple Indonesian municipalities and longer-term observation to determine whether similar patterns occur elsewhere.
Author Profiles
Tamam Rosid is affiliated with Muhammadiyah University of Berau, East Kalimantan. Sarsiti Sarsiti, Cicilia Puji Rahayu, Rohwiyati Rohwiyati, Praptiestrini Praptiestrini, and Dewi Pujiani are affiliated with University of Surakarta. Their work in this article focuses on public sector accounting, regional financial transparency, tax administration, taxpayer compliance, and regional financial management.
Research Source
Article Title: Accounting and Transparency of Regional Financial Resources: Challenges of Tax Collection and Taxpayer Compliance in Surakarta
Authors: Tamam Rosid, Sarsiti Sarsiti, Cicilia Puji Rahayu, Rohwiyati Rohwiyati, Praptiestrini Praptiestrini, and Dewi Pujiani
Affiliations: Muhammadiyah University of Berau and University of Surakarta
Journal: International Journal of Finance and Business Management (IJFBM)
Publication Year: 2026
Volume and Pages: Vol. 4, No. 4, 2026, pp. 437–452
DOI: 10.59890/ijfbm.v4i4.17
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