Bulungan Regency Strengthens Fiscal Independence Through Dual Property Tax Strategies Amid National Budget Cuts

Gloria Florensia Br Surbakti Rabu, September 02, 2026
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FORMOSA NEWS

Researchers Alin Ingan, Abdul Majid Bakri, and Dinar from Universitas Fajar published a study in August 2026 analyzing how Bulungan Regency uses property tax optimization to secure local revenue. The study highlights how local governments in Indonesia can maintain financial stability despite declining central government budget transfers. By assessing tax collection performaResearchers Alin Ingan, Abdul Majid Bakri, and Dinar from Universitas Fajar published a study in August 2026 analyzing how Bulungan Regency uses property tax optimization to secure local revenue. The study highlights how local governments in Indonesia can maintain financial stability despite declining central government budget transfers. By assessing tax collection performance from 2020 through 2025, the research demonstrates how strategic management in the Urban and Rural Land and Building Tax (PBB-P2) subsector directly impacts regional fiscal autonomy.

Background and Regional Relevance

Local governments across Indonesia rely heavily on Local Own-Source Revenue (PAD) to fund infrastructure, public education, healthcare, and administrative services. However, a nationwide reduction in Regional Finance Transfer Allocations (TKD) from the central government has forced regional leaders to seek independent revenue sources.

In Bulungan Regency, overall local revenue expanded from IDR 101.75 billion in 2020 to IDR 244.37 billion in 2025. PBB-P2 serves as the third-largest contributor to local tax revenues in the region. Despite its strong potential, PBB-P2 revenue performance experienced fluctuations. Annual targets were consistently met from 2020 to 2024, but tax collection fell to 86.60% of its target in 2025—generating IDR 6.06 billion against a target of IDR 7.00 billion due to economic pressures, local budget efficiencies, and public compliance issues. Evaluating tax management strategies is therefore essential for maintaining long-term development spending.

Research Methodology

The researchers conducted a qualitative descriptive case study centered on the Regional Revenue Agency (Bapenda) of Bulungan Regency. Primary data was gathered over a three-month period from May to July 2026 through structured interviews with key division heads responsible for revenue planning, management, evaluation, and information systems.

Secondary data included official target and realization reports of PBB-P2 revenue from 2020 to 2025. The authors applied the interactive qualitative analysis framework by Miles and Huberman—consisting of data reduction, data presentation, and continuous verification—and validated their findings using source, technique, and time triangulation.

Key Findings: Intensification and Extensification Strategies

The study revealed that Bapenda implemented a two-pronged strategic management framework to maximize property tax collection:

  • Intensification Efforts: To boost revenue from existing registered taxpayers, Bapenda maintained stable, non-burdensome Tax Object Sale Values (NJOP) and introduced a tiered rate scheme (0.2% for high-value properties, 0.15% for standard properties, and 0.1% for agricultural/livestock land). The agency also digitalized payments via regional bank apps (Kaltimtara Bank), e-wallets (GoPay, DANA), Tokopedia, and Pos Indonesia, waived late payment penalties in 2021 and 2025, conducted door-to-door collection, updated taxpayer databases across 10 districts, and required tax clearance for public services.
  • Extensification Efforts: To broaden the taxpayer base, the agency conducted comprehensive community outreach across rural villages, integrated land transaction data with the local Land Office, and established mobile tax service units at Public Service Malls and sub-district offices.

Primary Implementation Challenges

Despite strategic improvements, the research identified several operational bottlenecks:

  • Taxpayer Compliance: Public compliance remains low at roughly 45%, driven by tax avoidance mindsets, economic constraints, and confusion caused by regional tax issues in news media.
  • Data Inaccuracies: Legacy errors in property ownership records dating back to the 2014 transfer of tax administration from central to local authority remain unresolved.
  • Human Resource Constraints: Fewer than seven field officers handle data collection and billing for the entire regency, with a complete absence of dedicated tax bailiffs or debt collectors.
  • Geographic and Digital Barriers: Remote rural settlements, island/coastal fishpond zones, and telecommunication "blank spots" hinder physical collection tours and online payment adoption.

Real-World Impact and Recommendations

The findings offer practical frameworks for policymakers and public sector managers navigating fiscal decentralization. To overcome existing barriers, the researchers advise local governments to expand recruitment of temporary government personnel (P3K), cross-assign administrative staff to tax collection roles, and conduct technical training programs.

The authors also emphasize that bridging the digital gap in rural zones and maintaining transparent communication regarding how tax revenues fund local infrastructure are vital steps to building public trust and ensuring sustainable regional growth.

Academic Quote

"The strategies to increase PBB-P2 revenue in an effort to boost Bulungan Regency's local revenue from 2020 to 2025 and beyond are still relevant to continue... The intensification and extensification strategies carried out are not merely partial, but these two strategies must work together in every aspect or authority in each sector implementing the stages of PBB-P2 collection."

Author Profile

  • Alin Ingan, M.Si. (Candidate): Master's researcher in Public Administration and Regional Governance at Universitas Fajar, specializing in local tax policy and public financial management.
  • Abdul Majid Bakri, Ph.D.: Senior Lecturer and Researcher at Universitas Fajar, specializing in strategic public management and regional financial planning.
  • Dinar, M.Si.: Academic Supervisor and Lecturer at Universitas Fajar, specializing in public sector governance and regional economic policy.

Source Information

Gloria Florensia Br Surbakti

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